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A friend asks to borrow
$55
from you and in return will pay you
$58
in one year. If your bank is offering a
6.0%
interest rate on deposits and loans:a. How much would you have in one year if you deposited the
$55
instead?b. How much money could you borrow today if you pay the bank
$58
in one year?
c. Should you loan the money to your friend or deposit it in the bank?
a. How much would you have in one year if you deposited the
$55
instead?If you deposit the money in the bank today you will have
$nothing
in one year. (Round to the nearest cent.)b. How much money could you borrow today if you pay the bank
$58
in one year?You will be able to borrow
$nothing
today.(Round to the nearest cent.)
c. Should you loan the money to your friend or deposit it in the bank?(Select from the drop-down menu.)
From a financial perspective, you should
(Lend the money/Deposit the money)
, as it will result in more money for you at the end of the year.(Select from the drop-down menu.)
Answer & Explanation
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