Mathematics
Johnaswopes
36

Bonds issued by Raxin Accounting have a total yield of 11.4% annually, while Raxin Accounting stocks have a total yield of 14.4% annually. If you invest $2,600 in Raxin Accounting bonds and $2,000 in Raxin Accounting stocks, which investment will have a greater return after nine years, and how much greater will it be

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(1) Answers
longhornlova12

This can be solved by comparing the future worth of each investment: F = p(1+i)^n Where F is the future worth P is the current value i is the interes rate n is the number of years for the bond F = 2600*(1+0.114)^9 F = $ 6869.74 For the stocks F = 2000*(1+0.144)^9 F = $ 6712.19 The bond has greater value by $ 157.55

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