Q3: Which one of the following two cases would you prefer as more profitable investment and why? Case 1: Deposit £5000 for two years in a saving account that pays simple interest at rate of 6% per annum. No withdrawal during the investment period. Case 2: Deposit £5000 for one year in a savings account that pays simple interest at rate of 6% per annum. Then, withdraw the money with interest and deposit into another account paying simple interest at 7.5% for one year. Case 1 because of higher return of £6600 Case 1 because of higher return of £5697.5 Case 2 because of higher return of £5697.5 Case 2 because of higher return of £6600

Q3: Which one of the following two cases would you prefer as more profitable investment and why? Case 1: Deposit £5000 for two years in a saving account that pays simple interest at rate of 6% per annum. No withdrawal during the investment period. Case 2: Deposit £5000 for one year in a savings account that pays simple interest at rate of 6% per annum. Then, withdraw the money with interest and deposit into another account paying simple interest at 7.5% for one year. Case 1 because of higher return of £6600 Case 1 because of higher return of £5697.5 Case 2 because of higher return of £5697.5 Case 2 because of higher return of £6600

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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< A friend asks to borrow $51 from you and in return will pay you $54 in one year. If your bank is offering a 6.2% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $51 instead? b. How much money could you borrow today if you pay the bank $54 in one year? c. Should you loan the money to your friend or deposit it in the bank?
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To figure out how much total interest that you earn when you reach your investment goal, you ____________. Select one: a. interest rate % * total payments - amount borrowed b. interest rate % * amount borrowed c. # payments * monthly payment - interest rate % * amount borrowed d. # of payments * monthly payment- amount borrowed

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