Charlie has $12,000 to invest for a period of 5 years. The following three alternatives are available to him: Account 1 pays 4.00% for year 1, 5.00% for year 2, 8.00% for year 3, 9.00% for year 4, and 12.00% for year 5, all with annual compounding. • Account 2 pays 12.00% for year 1, 9.00% for year 2, 8.00% for year 3,5.00% for year 4, and 4.00% for year 5, all with annual compounding. • Account 3 pays interest at the rate of 7.56183 % per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? Year 5 Balance, Alternative 1: $ Year 5 Balance, Alternative 2: $ Year 5 Balance, Alternative 3: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is £5.

Charlie has $12,000 to invest for a period of 5 years. The following three alternatives are available to him: Account 1 pays 4.00% for year 1, 5.00% for year 2, 8.00% for year 3, 9.00% for year 4, and 12.00% for year 5, all with annual compounding. • Account 2 pays 12.00% for year 1, 9.00% for year 2, 8.00% for year 3,5.00% for year 4, and 4.00% for year 5, all with annual compounding. • Account 3 pays interest at the rate of 7.56183 % per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? Year 5 Balance, Alternative 1: $ Year 5 Balance, Alternative 2: $ Year 5 Balance, Alternative 3: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is £5.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Charlie has $10,000 to invest for a period of 5 years. The following three alternatives are available to Charlie: Account I pays 4% for the 1st year, 6% for year 2, 8% for year 3, 10% for year 4, and 12% for year 5, all with annual compounding. Account II pays 12% for the 1st year, 10% for year 2, 8% for year 3, 6% for year 4, and 4% for year 5, all with annual compounding. Account III pays interest at the rate of 7.96294% per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie’s best choice?
Linda deposits $60,000 into an account that pays simple interest at a rate of 6% per year. Bob deposits $60,000 into an account that also pays 6% interest per year. But it is compounded annually. Find the interest Linda and Bob earn during each of the first three years. Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits. Year First Second Third Interest Linda earns (Simple interest) $3600 $3600 $3600 Interest Bob earns (Interest compounded annually) $3600 $3960 $4176 Who earns more interest? Linda earns more. Bob earns more. They earn the same amount. Linda earns more. Bob earns more. They earn the same amount. Linda earns more. Bob earns more. O They earn the same amount. X S
When you take your job, you decide to start saving for your retirement. You put $5,000/yr into the co’s plan, which averages 8% interest/yr. Five yrs later, you move to another job and start a new plan. You never get around to merging the funds, if the 1st plan continued to earn interest at the rate of 8%/yr for 35 yrs after you stopped making contributions, how much is the account worth?
Q) A civil engineer planning for her retirement places 11% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $200,000 and she expects her salary to increase by 4% each year, what will be th future worth of her retirement fund after 14 years provided it earns 8% per year? Solve it correctly. Typed or handwriting with concept use. Not solve in excel works.
How long for $1,000 to become $2,000 invested at 7.8% compounded annually? Semi-annually? Quarterly? Monthly? Daily? Answers: 9.23 ; 9.06 ; 8.97 ; 8.92 ; 8.89 (years)
Frasier is 33 years old and just received an inheritance from his parents' estate. He wants to invest an amount of money today such that he can receive $5,000 at the end of every month for 15 years when he retires at age 65. If he can earn 9% compounded annually until age 65 and then 5% compounded annually when the fund is paying out, how much money must he invest today? show solution
You just invested $5,000 in Apple's stock that will yield 10% per year. Assumed that your annual returns are invested, how long will it take to triple your investment? 10 years 11.5 years 30 years 7.2 years
Since your first birthday, your grandparents have been depositing $110 into a savings account every month. The account pays 12% interest annually. Immediately after your grandparents make the deposit on your 18th birthday, the amount of money in your savings account will be closest to ________.
Find the value of P and F in the cash flow diagram. Use uniform serles capital recovery factor & arithmetic gradient factor, i=10.5 per year F = 2 to VP=? $600 $600 $600 $600 ¹4 $650 5 $750
3) Ahmad plans to make the deposits and withdrawals amounts shown in the cash shown below, find how much will be in his account at end of year 10 at i=10% per year: $10,000 0 1 2 3 $8,000 4 $4,000 5 6 7 $6,000 8 9 10 year
A man purchased a share or Stock for P135.OO six years ago and has received a dividend of P6.00 at the end of each year. If he sold the share for P120 today, at what rate could he consider that he has been paid interest. Assuming that he would have re-invested such interest at 4% compounded annually? *with solution please*
The equivalent value in year 10 equals to : $600 i=5% 2 3 4 5 6 7 $300 $400 Select one: о a. =600(F/P,5%,10) + 300 (F/P,5%,7) + 400 (F/P,5%,4) b. =600(P/F,5%,10) + 300(P/F,5%,8) + 400 (F/P,5%,5) c. =500(F/P,5%,9) + 300 (F/A,5%,8) + 400 (F/P,5%,5) d. =600(F/P,5%,10) + 300 (F/P,5%,8) + 400 (F/P,5%,5) F = ? +∞ 8. 9 10