Jane just inherited $30,000 from a rich uncle. She decides to invest the money for a period of 5 1) years and then use the accumulated amount to make a down payment on a new house. EzMoney, Inc. is willing to pay 6% per year compounded monthly on a five-year investment, but they will charge an administrative fee that is 2% of the amount invested and this has to be paid initially at the time of investment. HiReturn, Inc., offers 5.75% per year compounded daily if she deposits the entire amount in their premier investment fund. Which investment option should Jane choose and why?
Jane just inherited $30,000 from a rich uncle. She decides to invest the money for a period of 5 1) years and then use the accumulated amount to make a down payment on a new house. EzMoney, Inc. is willing to pay 6% per year compounded monthly on a five-year investment, but they will charge an administrative fee that is 2% of the amount invested and this has to be paid initially at the time of investment. HiReturn, Inc., offers 5.75% per year compounded daily if she deposits the entire amount in their premier investment fund. Which investment option should Jane choose and why?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 28P
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Transcribed Image Text:Jane just inherited $30,000 from a rich uncle. She decides to invest the money for a period of 5
1)
years and then use the accumulated amount to make a down payment on a new house. EzMoney, Inc. is willing
to pay 6% per year compounded monthly on a five-year investment, but they will charge an administrative fee
that is 2% of the amount invested and this has to be paid initially at the time of investment. HiReturn, Inc.,
offers 5.75% per year compounded daily if she deposits the entire amount in their premier investment fund.
Which investment option should Jane choose and why?
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