Martin Is Offered an Investment Where for $5000 Today, He

question 73

Multiple Choice

Martin is offered an investment where for $5000 today, he will receive $5250 in one year. He decides to borrow $5000 from the bank to make this investment. What is the maximum interest rate the bank needs to offer on the loan if Martin is at least to break even on this investment?

• A) 5.0%
• B) 3.2%
• C) 4.8%
• D) 5.6%

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Definitions:

Commodity Bundle

A specific combination of goods or services that is considered as a single entity in economic analysis or transactions.

Price Of Peaches

The market value assigned to peaches, which can fluctuate based on factors such as demand, supply, quality, and seasonal availability.

Price Of Pears

The market value at which pears are sold, varying based on factors like quality, seasonality, and availability.

Entire Budget

Refers to the total amount of financial resources available for allocation or expenditure by an entity or individual.