You have $3500 to invest, and you have two options: Option A: 3.725% compounded semiannually Option B: 3.675% 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? Option A 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? Yes No %24
You have $3500 to invest, and you have two options: Option A: 3.725% compounded semiannually Option B: 3.675% 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? Option A 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? Yes No %24
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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