Project that is expected to have a profit


Problem:

Assume you can invest $50,000 for one year in a project that is expected to have a 20% profit. You can borrow money at a 12% interest rate. If you borrow $40,000 and invest $10,000 of your own money, what will your rate of return be if things go as expected?

Note: Please describe comprehensively and provide step by step solution.

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Finance Basics: Project that is expected to have a profit
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