Charlie has $8,000 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 10.00% for year 5, all with annual compounding. • Account 2 pays 10.00% 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 7.17490% per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? No alternative is better than the others Year 5 Balance, Alternative 1: $ 126 Year 5 Balance, Alternative 2: $ 126 Year 5 Balance, Alternative 3: $ 126 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +5.

Charlie has $8,000 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 10.00% for year 5, all with annual compounding. • Account 2 pays 10.00% 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 7.17490% per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? No alternative is better than the others Year 5 Balance, Alternative 1: $ 126 Year 5 Balance, Alternative 2: $ 126 Year 5 Balance, Alternative 3: $ 126 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +5.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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