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Your grandmother gave you money to start saving for retirement. You have $7.500 to begin investing in a GIC. Consider all factors in the decision. In a brief paragraph, justify your decision, including a description of all factors that would affect That dec

Your grandmother gave you money to start saving for retirement. You have $7.500 to begin investing in a GIC. Consider all factors in the decision. In a brief paragraph, justify your decision, including a description of all factors that would affect That dec

Essentials Of Investments
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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Your grandmother gave you money to start saving for retirement. You have $7.500 to begin investing in a GIC. Consider all factors in the decision.

In a brief paragraph, justify your decision, including a description of all factors that would affect That dec

Length of term 1 2 3 Annual Compounding or Interest Paid Annually 3.15% A = 7500(1+0.0315)¹ = 7500(1.0315) = $7736.25 3.25% A = 7500(1+0.0325) 7500(1.0325)² = = $7995.42 3.35% A = 7500(1+0.0335) 7500(1.0335) = $8279.28 3 Interest Paid Monthly or Semi-Annually 2.98% 1 I = 7500 x 0.0298 x 12 = $18.63 A = 7500+ (18.63 x 12) = 7500 + 223.56 = $7723.56 3.08% 1 = 7500 x 0.0308x12 = $19.25 A = 7500+ (19.25 x 24) = 7500 + 462 = $7962 3.13% I = 7500 x 0.0313 x = $19.56 1 12 A 7500 + (19.56 x 36) = 7500 + 704.16 = $8204.16
Transcribed Image Text:Length of term 1 2 3 Annual Compounding or Interest Paid Annually 3.15% A = 7500(1+0.0315)¹ = 7500(1.0315) = $7736.25 3.25% A = 7500(1+0.0325) 7500(1.0325)² = = $7995.42 3.35% A = 7500(1+0.0335) 7500(1.0335) = $8279.28 3 Interest Paid Monthly or Semi-Annually 2.98% 1 I = 7500 x 0.0298 x 12 = $18.63 A = 7500+ (18.63 x 12) = 7500 + 223.56 = $7723.56 3.08% 1 = 7500 x 0.0308x12 = $19.25 A = 7500+ (19.25 x 24) = 7500 + 462 = $7962 3.13% I = 7500 x 0.0313 x = $19.56 1 12 A 7500 + (19.56 x 36) = 7500 + 704.16 = $8204.16
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