Question

In: Finance

You are given two investment alternatives. You can either choose Option M, and invest $100 per...

You are given two investment alternatives. You can either choose Option M, and invest $100 per month, starting next month, into an account earning 1% interest per month or you can choose Option Y, and invest $1,200 per year, starting next year, into an account earning 12% interest per year. At the end of three years, which option will provide the highest future value?

Solutions

Expert Solution

Please upvote if the ans is helpful. In case of doubt,Do comment.Thanks.


Related Solutions

You can invest your money in either investment ONE or investment TWO. You will invest for...
You can invest your money in either investment ONE or investment TWO. You will invest for 2 years. Investment ONE yields 6% he first year and 65% the second year. Investment TWO yields 65% the first year and 6% the second year. Interest is compounded the same for both investments. Also, interest is compounded the same for both years. Which investment leads to the higher return? a. investment ONE b. investment TWO c. the return on investment ONE = the...
Q2: Suppose a US investor has $4000 to invest and can choose either a US investment...
Q2: Suppose a US investor has $4000 to invest and can choose either a US investment paying 2% or a foreign investment paying 4%, where e is currently 1.14 and the investor can lock in e in one year equal to 1.16. Q2a- How much will the US investment be worth after a year? q2b- How much foreign currency can investor get now? Q2c- How much foreign currency will investor get after a year? Q2d-How much (in dollars) will the...
Suppose a US investor has $11900 to invest and can choose either a US investment paying...
Suppose a US investor has $11900 to invest and can choose either a US investment paying 2.25% or a foreign investment paying 12%, where e is currently 32. What future e would leave the investor indifferent between investing at home or abroad?
You are considering two investment options. In option​ A, you have to invest ​$6,000 now and...
You are considering two investment options. In option​ A, you have to invest ​$6,000 now and ​$1,100 three years from now. In option​ B, you have to invest ​$3,200 ​now,​ $1,300 a year from​ now, and ​$1,000 three years from now. In both​ options, you will receive four annual payments of ​$2,200 each.​ (You will get the first payment a year from​ now.) Which of these options would you choose based on​ (a) the conventional payback​ criterion, and​ (b) the...
Today, you have $40,000 to invest. Two investment alternatives are available to you. One would require...
Today, you have $40,000 to invest. Two investment alternatives are available to you. One would require you to invest your $40,000 now; the other would require the $40,000 investment two years from now. In either case, the investments will end five years from now. The cash flows for each alternative are provided below. Using a MARR of 10%, what should you do with the $40,000 you have? Year Alternative 1 Alternative 2 0 -$40,000 $0 1 $10,000 $0 2 $10,000...
6-10. Today, you have $40,000 to invest. Two investment alternatives are available to you. One would...
6-10. Today, you have $40,000 to invest. Two investment alternatives are available to you. One would require you to invest your $40,000 now; the other would require the $40,000 investment two years from now. In either case, the investments will end five years from now. The cash flows for each alternative are provided below. Using a MARR of 10%, what should you do with the $40,000 you have? Year Alternative 1 Alternative 2 0 -$40,000 $0 1 $10,000 $0 2...
you have $100 to invest in two different investment projects, A and B, the total returns...
you have $100 to invest in two different investment projects, A and B, the total returns from which (TR and TR) are given below. the cost of purchasing a unit of investment in each project is $10 per unit. your problem is to invest the $100 in the two invest the $100 in the two investments so as to maximize your total return (for example, if you invested the entire $100 in investment B, you would receive a total return...
You could choose to invest in the stock market at 15% or you can choose to...
You could choose to invest in the stock market at 15% or you can choose to invest in government bonds at 7%. You choose the stock market. What is the opportunity cost of capital? a. 5% b. 7% c. 12%
1. An investor has $60,000 to invest in a $280,000 property. He can obtain either (option...
1. An investor has $60,000 to invest in a $280,000 property. He can obtain either (option A) a $220,000 loan at 9.5 percent for 20 years; or (option B) a $180,000 loan at 8.75 percent for 20 years and a second mortgage for $40,000 at 13 percent for 20 years. All loans require monthly payments and are fully amortizing. How much more would be the effective cost % if you went forward with option A instead of option B. I.e.,...
There are two cities, San Fran and Eugene, and 100 identical workers who can choose to live in either city.
There are two cities, San Fran and Eugene, and 100 identical workers who can choose to live in either city. Suppose the indirect utility of living in either city is given by: Vj=Wj -Rj where Wj is the wage of living in either city j and Rj is the rent in city j. Wages in Eugene are $200 and wages in San F. are $400. Rents in Eugene, Re are given by: Re = 30 + Le, where Le is...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT