1. If a company has an opportunity to invest $85000 now for 16 years at 16% per year simple interest or 8% per year compound interest, which investment should be made?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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1. If a company has an opportunity to invest $85000 now for 16 years at 16% per
year simple interest or 8% per year compound interest, which investment should be
made?
2. How much money can be withdrawn at the end of every semiannual for 12 years
from a retirement fund which earns 8% per semiannual compound interest and has a
present amount of $120000 in it?
Transcribed Image Text:1. If a company has an opportunity to invest $85000 now for 16 years at 16% per year simple interest or 8% per year compound interest, which investment should be made? 2. How much money can be withdrawn at the end of every semiannual for 12 years from a retirement fund which earns 8% per semiannual compound interest and has a present amount of $120000 in it?
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