A finance company advertises two investment plans. In plan 1, the company pays $12,000 after 15 years for every $. 1,000 invested now. In plan 2, for every $ 1,000 invested, the company pays $ 4,000 at the end of the 10th year and $ 4,000 at the end of 15th year. Select the best investment plan from the investor’s point of vie
A finance company advertises two investment plans. In plan 1, the company pays $12,000 after 15 years for every $. 1,000 invested now. In plan 2, for every $ 1,000 invested, the company pays $ 4,000 at the end of the 10th year and $ 4,000 at the end of 15th year. Select the best investment plan from the investor’s point of vie
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A finance company advertises two investment plans. In plan 1,
the company pays $12,000 after 15 years for every $. 1,000 invested now.
In plan 2, for every $ 1,000 invested, the company pays $ 4,000 at the end
of the 10th year and $ 4,000 at the end of 15th year. Select the best investment
plan from the investor’s point of view at i = 12%, compounded annually.
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