Advantage of the high yield investment


Problem: You have two investment opportunities. One will have a 10% rate of return on an investment of $500; the other will have an 11% rate of return on a principal of $700.

You would like to take an advantage of the higher yield investment but have only $500 available.

What is the maximum rate of return that you would pay to borrow the $200 need to take advantage of the high yield investment?

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Accounting Basics: Advantage of the high yield investment
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