You have the option of four investments: 1. Investment A with an APR of 8% and compounds daily (assume 365 days in a year) 2. Investment B with an APR of 8% and compounds monthly 3. Investment C with an APR of 8.2% and compounds quarterly 4. Investment D with an APR of 8.4% and compounds annually If you want the investment with the highest return, which investment would you choose?

You have the option of four investments: 1. Investment A with an APR of 8% and compounds daily (assume 365 days in a year) 2. Investment B with an APR of 8% and compounds monthly 3. Investment C with an APR of 8.2% and compounds quarterly 4. Investment D with an APR of 8.4% and compounds annually If you want the investment with the highest return, which investment would you choose?

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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There are three investments being offered to you; one pays you $100,000 at the end of 10 years; another one pays you $90,000 at the end of 9 years; and the other one $130,000 at the end of 11 years. If your required return on investment is 10%, which would you pick?
You have your choice of two investment accounts. Investment A is a 7-year annuity that features end-of-month $2,900 payments and has an APR of 6 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 6 percent, also good for 7 years. How much money would you need to invest in B today for it to be worth as much as Investment A 7 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
You have $68,513 you want to invest. You are offered an investment plan that will pay you 4.58 percent per year for the first 20 years and 6.81 percent per year for the last 21 years. How much will you have (in $) at the end of the two periods? Answer to two decimals. < Previous
Interest rate (with changing years). Keiko is looking at the following investment choices and wants to know what annual rate of return each choice produces. a. Invest $420.00 and receive $879.72 in 9 years. b. Invest $3,400.00 and receive $11,161.14 in 15 years. c. Invest $32,893.92 and receive $140,000.00 in 24 years. d. Invest $31,322.65 and receive $1,300,000.00 in 45 years. a. What annual rate of return will Keiko earn if she invests $420.00 today and receives $879.72 in 9 years? % (Round to two decimal places.)
You won a 1.5 million lottery. You are given the following options to get paid on your winnings. If you can earn 12% rate with monthly compounding on your investments, which option would you choose? Find each option's present value (PV) and then choose which option is the best one. (For your answer, round to the nearest integer.) OPTION A: receive $20,000 per month at the end of each month until 60th month, & $30,000 per month from 61st month until 70th month. PV of this option would be Question Blank 1 of 6 Answer OPTION B: receive 60% of your winning today as a lump sum payment (40% is used toward taxes) PV of this option would be Question Blank 2 of 6 Answer OPTION C: receive 25,000 per month at the end of each month for the next 5 years PV of this option would be Question Blank 3 of 6 Answer OPTION D: receive 24,000 per month at the beginning of each month for the next 5 years PV of this option would be Question Blank 4 of 6 Answer…
You’re trying to choose between two different investments, both of which have upfront costs of K75,000. Investment G returns K135,000 in six years. Investment H returns K195,000 in 10 years. Which of these investments has the higher return?
An investment will pay $600 at the end of each of the next 2 years, $700 at the end of Year 3, and $1,000 at the end of Year 4. What is its present value if other investments of equal risk earn 6 percent annually? a. $1,821.82 b. $1,913.83 c. $2,297.07 d. $2,479.86 e. $2,735.85
Assume that you can invest to earn a stated annual rate of return of 12 percent, but where interest is compounded semiannually. If you make 20 consecutive semiannual deposits of $500 each, with the first deposit being made today, what will your balance be at the end of Year 20? Group of answer choices $52,821.19 $57,900.83 $58,988.19 $62,527.47 $64,131.50
An investment will pay $20,400 at the end of the first year, $30,400 at the end of the second year, and $50,400 at the end of the third year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. Required: Determine the present value of this investment using a 9 percent annual interest rate.
Derive an equation to find the end-of-year future sum F that is equivalent to a series of n beginning-of-year payments B at interest rate i. Then use the equation to determine the future sum F equivalent to six B payments of $100 at 8% interest.
You are considering two investment options. In option A, you have to invest RM4000 now and RM1000 three years from now. In option B. you have to invest RM2500 now, RM1500 a year from now, and RM1000 three years from now. In both options, you will receive four annual income of RM3000 each. (You will get the first payment a year from now.) Which of these options would you choose based on (a) the conventional payback criterion, and (b) the present worth criterion, assuming 13% interest? Based on conventional payback period method, choose either (A/B/Both) PW Option A PW Option B Based on PW analysis method, choose Option (A or B) Submit :A : 9290.7 : 6602.9 :A Format Format Format Format
An investment pays $1000 in two years and $3000 at the end of the fifth year. It is priced to yield an annual effective rate of 7.5%. Find the price, Macaulay duration, modified duration and convexitv Estimate the price if the interest rate changes to 7.4% using modified duration.

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