ART A: An investor the option of either investing a sum of money at an annual interest rate of 8.3% compounded semi-annually or at an annual interest rate of 7.8% compounded weekly. Show which of the two options is better for the investor? PART B: Loyiso wins a dancing competition. He invests his prize money of rands on that same day in the following way: 40% of the prize money at an annual interest rate of 8.5% compounded continuously for 10 years, and the rest of the prize money at an annual interest rate of 11% compounded quarterly for 10 years. Let denote the total value of the investments after the 10 year period. (a) Show that rounding your calculations off to 4 decimal places. (b) What would
ART A: An investor the option of either investing a sum of money at an annual interest rate of 8.3% compounded semi-annually or at an annual interest rate of 7.8% compounded weekly. Show which of the two options is better for the investor? PART B: Loyiso wins a dancing competition. He invests his prize money of rands on that same day in the following way: 40% of the prize money at an annual interest rate of 8.5% compounded continuously for 10 years, and the rest of the prize money at an annual interest rate of 11% compounded quarterly for 10 years. Let denote the total value of the investments after the 10 year period. (a) Show that rounding your calculations off to 4 decimal places. (b) What would
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
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ART A:
An investor the option of either investing a sum of money at an annual interest rate of 8.3% compounded semi-annually or at an annual interest rate of 7.8% compounded weekly.
Show which of the two options is better for the investor?
PART B:
Loyiso wins a dancing competition. He invests his prize money of rands on that same day in the following way:
- 40% of the prize money at an annual interest rate of 8.5% compounded continuously for 10 years, and
- the rest of the prize money at an annual interest rate of 11% compounded quarterly for 10 years.
Let denote the total value of the investments after the 10 year period.
(a) Show that rounding your calculations off to 4 decimal places.
(b) What would
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