Charlie has $16,000 to invest for a period of 5 years. The following three alternatives are available to him: • Account 1 pays 3.00 % for year 1.4.00 % for year 2, 6.00% for year 3, 8.00 % for year 4, and 11.00 % for year 5, all with annual compounding. • Account 2 pays 11.00% for year 1, 8.00% for year 2, 6.00% for year 3, 4.00% for year 4, and 3.00% for year 5, all with annual compounding. • Account 3 pays interest at the rate of 6.36154% per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? Year 5 Balance, Alternative 1:$ Year 5 Balance, Alternative 2: $ Year 5 Balance, Alternative 3: $

Charlie has $16,000 to invest for a period of 5 years. The following three alternatives are available to him: • Account 1 pays 3.00 % for year 1.4.00 % for year 2, 6.00% for year 3, 8.00 % for year 4, and 11.00 % for year 5, all with annual compounding. • Account 2 pays 11.00% for year 1, 8.00% for year 2, 6.00% for year 3, 4.00% for year 4, and 3.00% for year 5, all with annual compounding. • Account 3 pays interest at the rate of 6.36154% per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? Year 5 Balance, Alternative 1:$ Year 5 Balance, Alternative 2: $ Year 5 Balance, Alternative 3: $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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