Borrower with a project that has rate of return

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Reference no: EM13896824

Suppose that you are a borrower with a project that has a rate of return of 2.5%. Which of the following offers to borrow $1,000 would let you earn a positive gain, provided a lender accepts your offer?

(I) You offer to borrow at an interest rate of 0.2%.

(II) You offer to borrow at an interest rate of 1.3%.

(III) You offer to borrow at an interest rate of 2.4%.

(IV) You offer to borrow at an interest rate of 3.5%.

(V) You offer to borrow at an interest rate of 4.6%.

Explain

Reference no: EM13896824

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