Answer:
15%
Explanation:
The maximum rate of return that would be paid to borrow an additional $4,000 needed can be calculated as
[tex]Rate of return =\frac{Amount of interest}{Amount borrowed}[/tex]
Rate of return = $600/$4000
Rate of return = 0.15 or 15%
NOTE: The amount of interest is the difference of interest earned at higher yield and interest earned at a lower yield.
Interest earned (higher yield) = $10,000 x 8%
Interest earned (higher yield) = $800
Interest earned (lower yield) = $14,000 x 10%
Interest earned (lower yield) = $1,400
Difference = $1,400-$800
Difference = $600
