Assume this investment is risk- less

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Reference no: EM132022618

(Financing-investment puzzle) Suppose you have been offered an investment opportunity that will pay you $2,200 per month for 60 months. However, you must invest $10,000 now and borrow $90,000 from a specified institution at 16% APR, for a total initial invest- ment of $100,000. The entire loan must be paid back at the end of the 60 months (princi- pal and interest will total $199,242.62). There are no taxes. Assume this investment is risk- less. Under what conditions would you want to undertake this investment?

Reference no: EM132022618

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