Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 10% interest compounded semiannually. Four Rivers offers 8% interest compounded quarterly. Melvin has $10,000 to invest. He expects to withdraw the money at the end of 4 years. Which bank gives Melvin the better deal? Check your answer. Mystic Interest 10% Compounded: Semiannually Four Rivers Interest 8% Compounded Quarterly Melvin's investment 10,000 Withdrawal expectation in years: 4 Required: Please use the above information to answer the following: Mystic Period used: Rate used: Factor used: Future value of investment: Four Rivers Period used: Rate used: Factor used: Future Value of investment: Which bank gives Melvin the better deal?
Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 10% interest compounded semiannually. Four Rivers offers 8% interest compounded quarterly. Melvin has $10,000 to invest. He expects to withdraw the money at the end of 4 years. Which bank gives Melvin the better deal? Check your answer. Mystic Interest 10% Compounded: Semiannually Four Rivers Interest 8% Compounded Quarterly Melvin's investment 10,000 Withdrawal expectation in years: 4 Required: Please use the above information to answer the following: Mystic Period used: Rate used: Factor used: Future value of investment: Four Rivers Period used: Rate used: Factor used: Future Value of investment: Which bank gives Melvin the better deal?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 2STP
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Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 10% interest compounded semiannually. Four Rivers offers 8% interest compounded quarterly. Melvin has $10,000 to invest. He expects to withdraw the money at the end of 4 years. Which bank gives Melvin the better deal? Check your answer.
| Mystic | |
| Interest | 10% |
|---|---|
| Compounded: | Semiannually |
| Four Rivers | |
| Interest | 8% |
|---|---|
| Compounded | Quarterly |
| Melvin's investment | 10,000 |
|---|---|
| Withdrawal expectation in years: | 4 |
Required:
Please use the above information to answer the following:
Mystic
- Period used:
- Rate used:
- Factor used:
Future value of investment:
Four Rivers
- Period used:
- Rate used:
- Factor used:
- Future Value of investment:
- Which bank gives Melvin the better deal?
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