A Ponzi scheme involves using new investment dollars to trick current investors into thinking they are earning high returns. If someone running a Ponzi scheme is bringing in new investors at a rate of 25% per year and stealing 10% of investments, what return could he pay investors? (Assume the money is never really invested.)

a) 15%

b) 20%

c) 25%

Question

Business

Morgan Peterson

3 March, 15:01

A Ponzi scheme involves using new investment dollars to trick current investors into thinking they are earning high returns. If someone running a Ponzi scheme is bringing in new investors at a rate of 25% per year and stealing 10% of investments, what return could he pay investors? (Assume the money is never really invested.)

a) 15%

b) 20%

c) 25%

+5

Answers (1)

Know the Answer?

Barkley · Answer 1

Answer: a) 15%

Explanation:

If an investor is bring in someone new at 25% and is stealing 10% of the investment, the return he could pay investors is (25-10%) which is 15%.