Bill Baxter has $24,000 to invest for a year. He can lend it to his sister who has agreed to pay 10% simple interest for the

Question

Bill Baxter has $24,000 to invest for a year. He can lend it to his sister who has agreed to pay 10% simple interest for the year. Or, he can invest it with a bank at 8% compounded quarterly for the year. How much additional interest would the simple interest loan to his sister generate? Find the effective interest rate for both investments.

Kunduz · Accepted Answer

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