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Calculate the rate of return if the money is lent to simone

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Question - A friend has $1,100 that has been saved from her part-time job. She will need her money, plus any interest earned on it, in six months and has asked for your help in deciding whether to put the money in a bank savings account at 3.8% interest or to lend it to Simone. Simone has promised to repay $1,139 after six months

Required:

a. Calculate the interest earned on the savings account for six months.

b. Calculate the rate of return if the money is lent to Simone.

c. Which alternative would you recommend?

Reference no: EM132076005

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