4) Three years from now, Mr. Dela Cruz wants to start a business. In order to do that, he estimated that he needs initial capital of Php100,000. He can deposit an amount today in one of the following accounts: Account #1: offers 1.5% annual compound interest rate Account #2: offers a 1.4% annual interest rate compounded quarterly Account #3: offers a 1.1% annual interest rate compounded monthly Hint: Use the formula P- for annually (1r P-A for quarterly and monthly where m stands for the number of months (1+r) Which of the accounts will require the least deposit?
4) Three years from now, Mr. Dela Cruz wants to start a business. In order to do that, he estimated that he needs initial capital of Php100,000. He can deposit an amount today in one of the following accounts: Account #1: offers 1.5% annual compound interest rate Account #2: offers a 1.4% annual interest rate compounded quarterly Account #3: offers a 1.1% annual interest rate compounded monthly Hint: Use the formula P- for annually (1r P-A for quarterly and monthly where m stands for the number of months (1+r) Which of the accounts will require the least deposit?
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
Section: Chapter Questions
Problem 1PS
Related questions
Question
Please provide a neat solution thank you
Transcribed Image Text:4) Three years from now, Mr. Dela Cruz wants to start a business. In order to do that, he estimated that he needs initial capital of
Php100,000. He can deposit an amount today in one of the following accounts:
Account #1: offers 1.5% annual compound interest rate
Account #2; offers a 1.4% annual interest rate compounded quarterly
Account #3: offers a 1.1% annual interest rate compounded monthly
Hint: Use the formula P=4 for annually
(1+r)
A for quarterly and monthly where m stands for the number of months
(1+r)
Which of the accounts will require the least deposit?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education