You must choose between two investments both maturing at the end of 5 years. For investment you will deposit R20,000 today at an annual interest rate of 8% for 5 years. Investment B requires you to make five end of year payments of R5,000. Investment B offers an annual interest rate of 9%. Which investment should you choose? a. Choose A, it will pay out R29,380 b. Choose A, it will pay out R117,340 c. Choose B, it will pay R 29,925 d. Choose B, it will pay R21,800

You must choose between two investments both maturing at the end of 5 years. For investment you will deposit R20,000 today at an annual interest rate of 8% for 5 years. Investment B requires you to make five end of year payments of R5,000. Investment B offers an annual interest rate of 9%. Which investment should you choose? a. Choose A, it will pay out R29,380 b. Choose A, it will pay out R117,340 c. Choose B, it will pay R 29,925 d. Choose B, it will pay R21,800

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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