Question: rt is about to loan his granddaughter cynthia 18000 for...
RT is about to loan his granddaughter Cynthia $18,000 for 1 year. RT’s TVOM, based upon his current investment earnings, is 12%, and he has no desire to loan money for a lower rate. Cynthia is currently earning 8% on her investments, but they are not easily available to her, and she is willing to pay up to $1,440 interest for the 1-year loan.
1) How much does RT require in interest?
2) How much is Cynthia going to earn?
3) Should they be able to successfully negotiate the terms of this loan within these parameters? Yes/No