Answered

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John is 63 years old, owns his house, and is a little bit anxious about whether
he has enough money for retirement. He is considering borrowing $20,000
against his home to invest in a series of aggressive growth sock mutual funds.
The track record for these funds over the last three years has been an average
growth rate of 21.2%. The interest rate on the loan would only be 7.5%. Should
john do this to help with his retirement?

Sagot :

Answer:

yes

Explanation:

John makes more money per year with the growth stock mutal funds

Tundexi

It will be an wise decision to borrow $20,000 against his home to invest in a series of aggressive growth sock mutual funds.

What is a wise investment decision?

This involve making decision that seems abnormal but are quite effective in the long-run.

Hence, it is a wise decision for John for his retirement if he $20,000 against his home to invest in a series of aggressive growth sock mutual funds because the high rate of the mutual fund will offset the loan interest rate.

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