Suppose you have $10,000 to invest for the next 30 years. You are given 3 choices on where to invest your money.Account #1Account #2Account #3a. Calculate the APR (assume P-$100, -1 year) for each account. Round to 2 decimal places, in percent form.Account #115.21% compounded monthly15.18% compounded daily15.16% compounded continuouslySHOW YOUR WORK BELOW. b. Based on your calculations, which account will you invest your $10,000? Why? How much money will you haveafter 30 years in the account that you have chosen? How much in total interest will you gain? In other words,from $10,000, by how much did your money increase?4C.In real life, if you have $10,000, will you make this investment? Why? If not, where would you rather invest yourmoney?Provide a COLLEGE LEVEL analysis below:

Using the formula below we can determine the effective annual interest rate for compounding monthly…

Answered: 1. Calculate the APR (assume P-$100, -1…

1. Calculate the APR (assume P-$100, -1 year) for each account. Round to 2 decimal places, in percent form. Account #1 Account #2 Account #3 4 SHOW YOUR WORK BELOW: APR % % %

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

Suppose you have $10,000 to invest for the next 30 years. You are given 3 choices on where to invest your money.
Account #1
Account #2
Account #3
a. Calculate the APR (assume P-$100, -1 year) for each account. Round to 2 decimal places, in percent form.
Account #1
15.21% compounded monthly
15.18% compounded daily
15.16% compounded continuously
SHOW YOUR WORK BELOW.

b. Based on your calculations, which account will you invest your $10,000? Why? How much money will you have
after 30 years in the account that you have chosen? How much in total interest will you gain? In other words,
from $10,000, by how much did your money increase?
4
C.
In real life, if you have $10,000, will you make this investment? Why? If not, where would you rather invest your
money?
Provide a COLLEGE LEVEL analysis below:

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