Joan purchases a 30-year federal government bond for $10,000 that pays 4 percent annual interest. Jim purchases $20,000 worth of 30-year corporate bonds that pay 7 percent annual interest. Joan’s goal is to earn $400 per year on her investment, and Jim’s goal is to earn $1,400 per year on his investment. Is Joan or Jim more efficient? Why? Is Joan or Jim more effective? Why?
Joan purchases a 30-year federal government bond for $10,000 that pays 4 percent annual interest. Jim purchases $20,000 worth of 30-year corporate bonds that pay 7 percent annual interest. Joan’s goal is to earn $400 per year on her investment, and Jim’s goal is to earn $1,400 per year on his investment. Is Joan or Jim more efficient? Why? Is Joan or Jim more effective? Why?
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 50P
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- Joan purchases a 30-year federal government bond for $10,000 that pays 4 percent annual interest. Jim purchases $20,000 worth of 30-year corporate bonds that pay 7 percent annual interest. Joan’s goal is to earn $400 per year on her investment, and Jim’s goal is to earn $1,400 per year on his investment.
- Is Joan or Jim more efficient? Why?
- Is Joan or Jim more effective? Why?
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