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31 May, 07:59

An investment will pay $ 287 comma 280 at the end of next year for an investment of $ 190 comma 000 at the start of the year. If the market interest rate is 8 % over the same period, should this investment be made?

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  1. 31 May, 09:37
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    Yes

    Explanation:

    Given that

    Present value = $190,000

    Future value = $287,280

    Market interest rate = 8%

    So to find out this investment should be made or not we have to calculate the percentage returns on investment that is equal to

    = Future Value : Present Value - 1

    = $287,280 : $190,000 - 1

    = 51.20%

    Since the investment return is more than the market interest rate so this investment should be made
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Home » Business » An investment will pay $ 287 comma 280 at the end of next year for an investment of $ 190 comma 000 at the start of the year. If the market interest rate is 8 % over the same period, should this investment be made?
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