I am comparing two investments. Each requires a yearly investment of $1000 for 20 years and offers a return of 8%. However, the timing of the investments are different. Investment A requires only one payment of $1000 on December 31st, while investment B requires two $500 payments, one in June and one in December. Which investment offers the bigger return and by how much? O Investment B, by $83,766 O Investment A, by $22,880 O Investment A, by $1750 O Investment B, by $1750
I am comparing two investments. Each requires a yearly investment of $1000 for 20 years and offers a return of 8%. However, the timing of the investments are different. Investment A requires only one payment of $1000 on December 31st, while investment B requires two $500 payments, one in June and one in December. Which investment offers the bigger return and by how much? O Investment B, by $83,766 O Investment A, by $22,880 O Investment A, by $1750 O Investment B, by $1750
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
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Transcribed Image Text:I am comparing two investments. Each requires a yearly investment of
$1000 for 20 years and offers a return of 8%. However, the timing of the
investments are different. Investment A requires only one payment of
$1000 on December 31st, while investment B requires two $500
payments, one in June and one in December. Which investment offers the
bigger return and by how much?
O Investment B, by $83,766
O Investment A, by $22,880
O Investment A, by $1750
O Investment B, by $1750
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