You sit down with the world's least helpful financial advisor who never tells you the future value of any investments but will give you the other info you need. Which investment option gives you the most money at the end of 10 years? Options: (A) Investing $1,000 at the beginning of each year with an annual interest rate of 8.5%. Interest compounds annually. (B) Investing $83.33 each month with an annual interest rate of 8%. Interest compounds monthly. (C) Investing $10,000 today with an annual interest rate of 5%. Interest compounds monthly.
You sit down with the world's least helpful financial advisor who never tells you the future value of any investments but will give you the other info you need. Which investment option gives you the most money at the end of 10 years? Options: (A) Investing $1,000 at the beginning of each year with an annual interest rate of 8.5%. Interest compounds annually. (B) Investing $83.33 each month with an annual interest rate of 8%. Interest compounds monthly. (C) Investing $10,000 today with an annual interest rate of 5%. Interest compounds monthly.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
You sit down with the world's least helpful financial advisor who never tells you the
Options:
(A) Investing $1,000 at the beginning of each year with an annual interest rate of 8.5%. Interest compounds annually.
(B) Investing $83.33 each month with an annual interest rate of 8%. Interest compounds monthly.
(C) Investing $10,000 today with an annual interest rate of 5%. Interest compounds monthly.
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