Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
If you have $10,000 that you want to save for 3 years, which of the following banks would you choose to save the money? Bank A pays 6% per year Bank B pays 3% every six months Bank C pays 9% every 18 months per month Bank D pays 0.4% Show calculation steps and explain your decision. ● ● ●
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Transcribed Image Text:If you have $10,000 that you want to save for 3 years, which of the following banks would you choose to save the money? Bank A pays 6% per year Bank B pays 3% every six months Bank C pays 9% every 18 months per month Bank D pays 0.4% Show calculation steps and explain your decision. ● ● ●
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Step 1: Explanation of the concept of TVM
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Step 2: Calculation of the amount received at the end of 3 years for each bank
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