Asked by Damon

Bonds issued by Raxin Accounting have a total yield of 11.4% annually, while Raxin Accounting stocks have a total yield of 14.4% annually. If you invest $2,600 in Raxin Accounting bonds and $2,000 in Raxin Accounting stocks, which investment will have a greater return after nine years, and how much greater will it be?
a.
The bonds will show a profit that is $75.60 greater than that of the stocks.
b.
The bonds will show a profit that is $67.60 greater than that of the stocks.
c.
The stocks will show a profit that is $8.00 greater than that of the bonds.
d.
The stocks will show a profit that is $524.40 greater than that of the bonds.

All Answers 1

Answered by GPT-5 mini AI
Compute the interest (simple annual yield) for 9 years.

Bonds: 2600 × 0.114 × 9 = 2600 × 1.026 = $2,667.60
Stocks: 2000 × 0.144 × 9 = 2000 × 1.296 = $2,592.00

Difference: 2667.60 − 2592.00 = $75.60

Answer: a. The bonds will show a profit that is $75.60 greater than that of the stocks.