uppose you're offered the following three accounts to invest $10,000 for 20 years: 16% simple interest, 8% interest compounded monthly, and an annuity with quarterly payments of $125 at 7% interest compounded quarterly. Which is the best choice? Round your answers to the nearest cent. Part: 0 / 4
uppose you're offered the following three accounts to invest $10,000 for 20 years: 16% simple interest, 8% interest compounded monthly, and an annuity with quarterly payments of $125 at 7% interest compounded quarterly. Which is the best choice? Round your answers to the nearest cent. Part: 0 / 4
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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Question
Suppose you're offered the following three accounts to invest
for
years:
simple interest,
interest compounded monthly, and an annuity with quarterly payments of
at
interest compounded quarterly. Which is the best choice? Round your answers to the nearest cent.
$10,000
20
16%
8%
$125
7%
Part: 0 / 4
0 of 4 Parts Complete
Part 1 of 4
The
$10,000
16%
$
|
and
annuity @ quarterly payments
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Step 1
VIEWStep 2 - Computation of amount under option 1 { $10,000 for 20 years at 16% simple interest}
VIEWStep 3-Computation of amount under option 2 {$10,000 for 20 years at 8%monthly compounded interest}
VIEWStep 4 - Computation of amount under option 3 { Quarterly Annuity of $125 @7%}
VIEWStep 5 - Conclusion
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