Question

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

Answer 1

A. in edge

Explanation:

$75.69

Answer 2

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