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Suppose a US investor has $11900 to invest and can choose either a US investment paying...

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Economics

Suppose a US investor has $11900 to invest and can choose eithera US investment paying 2.25% or a foreign investment paying 12%,where e is currently 32. What future e would leave the investorindifferent between investing at home or abroad?

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3.7 Ratings (606 Votes)
The investment in US pays 225 a year Amount invested 11900 Interest rate 225 or 00225 Interest earned in one year Amount invested Interest rate 11900 00225 26775 Amount after one year Amount invested    See Answer
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