a) Calculate the payment amount for each option. (AP - 6) OPTION 1 PV PMT FV Rate Periods Compounding Amount: = 11 = = II II 14000 5.25% biweekly OPTION 2 PV PMT FV Rate Periods Compounding = = 11 = = 11 = 11 Amount:

Essentials Of Investments
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Chapter1: Investments: Background And Issues
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PART A: SAVING YOUR MONEY
Alfred wants to save money for new car. He estimates that he will need $14 000. He has 2 years to save his
money.
Option 1: 5.25% per year, compounded biweekly.
Option 2: 6.00% per year, compounded monthly
a) Calculate the payment amount for each option. (AP - 6)
PV
PMT
FV
Rate
Periods
Compounding
Amount:
=
=
=
=
=
OPTION 1
14000
5.25%
biweekly
OPTION 2
PV
PMT
FV
Rate
Periods
Compounding
AP:
=
b) Which investment should he choose? Justify your answer. (TH-2)
=
=
=
=
16
Amount:
TH:
/2
Transcribed Image Text:PART A: SAVING YOUR MONEY Alfred wants to save money for new car. He estimates that he will need $14 000. He has 2 years to save his money. Option 1: 5.25% per year, compounded biweekly. Option 2: 6.00% per year, compounded monthly a) Calculate the payment amount for each option. (AP - 6) PV PMT FV Rate Periods Compounding Amount: = = = = = OPTION 1 14000 5.25% biweekly OPTION 2 PV PMT FV Rate Periods Compounding AP: = b) Which investment should he choose? Justify your answer. (TH-2) = = = = 16 Amount: TH: /2
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