3.1 Suppose Alex wants to save money to go for a holiday in three years' time. He needs R8 000 for his holiday. He has three options for saving his money: Option A: At 10% per annum simple interest Option B: At 3.25% compounded quarterly Option C: At 7.5% per annual interest compounded monthly a. Calculate the value of P for options A, B and C. nt A = P(1+2) "² b. Which option will allow Alex to save the least amount of money presently so he can still enjoy his planned holiday in three years' time?

3.1 Suppose Alex wants to save money to go for a holiday in three years' time. He needs R8 000 for his holiday. He has three options for saving his money: Option A: At 10% per annum simple interest Option B: At 3.25% compounded quarterly Option C: At 7.5% per annual interest compounded monthly a. Calculate the value of P for options A, B and C. nt A = P(1+2) "² b. Which option will allow Alex to save the least amount of money presently so he can still enjoy his planned holiday in three years' time?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 12PROB

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