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)3.2%
B)4.8%
C)5.0%
D)5.6%
E)2.5%

Question

Quizplus · Accepted Answer

To break even on this investment, Martin needs to make enough to cover the interest on the loan. The investment returns $5250 from a $5000 investment, which is a $250 profit. To find the maximum interest rate where he breaks even, we calculate ($250 / $5000) * 100% = 5%.

Martin Is Offered an Investment Where for $5000 Today,he Will