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You have $1000 to invest,, and you have two options:Option A: 1.725% compounded semiannuallyOption B: 1.675% compounded continuously.(a) Calculate the annual percentage yield for each option. (Round your answers to three decimal places.)Option A%Option B%Which is the better option?O Option AO Option B(b) Calculate the future value of each investment after 2 years and after 5 years. (Round your answers to two decimal places.)YearsOption AOption B$2$$Does your choice of option depend on the number of years you leave the money invested?O Yes How much money would you have to invest today at 6% APR compounded monthly to accumulate the sum of $250,000 in 30 years? (Round your answer to two decimal places.)

Question
You have $1000 to invest,, and you have two options:
Option A: 1.725% compounded semiannually
Option B: 1.675% compounded continuously.
(a) Calculate the annual percentage yield for each option. (Round your answers to three decimal places.)
Option A
%
Option B
%
Which is the better option?
O Option A
O Option B
(b) Calculate the future value of each investment after 2 years and after 5 years. (Round your answers to two decimal places.)
Years
Option A
Option B
$
2
$
$
Does your choice of option depend on the number of years you leave the money invested?
O Yes
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You have $1000 to invest,, and you have two options: Option A: 1.725% compounded semiannually Option B: 1.675% compounded continuously. (a) Calculate the annual percentage yield for each option. (Round your answers to three decimal places.) Option A % Option B % Which is the better option? O Option A O Option B (b) Calculate the future value of each investment after 2 years and after 5 years. (Round your answers to two decimal places.) Years Option A Option B $ 2 $ $ Does your choice of option depend on the number of years you leave the money invested? O Yes

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How much money would you have to invest today at 6% APR compounded monthly to accumulate the sum of $250,000 in 30 years? (Round your answer to two decimal places.)
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How much money would you have to invest today at 6% APR compounded monthly to accumulate the sum of $250,000 in 30 years? (Round your answer to two decimal places.)

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check_circleAnswer
Step 1

According to the given information:

Amount invested =$1000

Option (A) rate of interest =1.725% compounded semiannually

Formula used to find annual percentage yield is:

APY =1+
-1
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APY =1+ -1

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Step 2

For calculating option (1) put the values in the above formula:

For semiannually n=2;

APY =1+
-
-1
2
0.01725
1+
-1
2
=(1.008625)-
=1.01732-
=0.01732
1.732%
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APY =1+ - -1 2 0.01725 1+ -1 2 =(1.008625)- =1.01732- =0.01732 1.732%

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Step 3

For calculating option (2) rate of interest is 1.675%

And, in this case it is needed ...

APY (e" -1)
(016975)
0.01675
(0.01689)
=1.689%
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APY (e" -1) (016975) 0.01675 (0.01689) =1.689%

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Tagged in

Math

Calculus

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