Find the best answers to your questions at Westonci.ca, where experts and enthusiasts provide accurate, reliable information. Ask your questions and receive detailed answers from professionals with extensive experience in various fields. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.
Sagot :
Answer:
You are better off investing today in the mutual fund and earn 8.2 percent semiannually for 10 years.
Step-by-step explana
We will need to calculate the interest generated in both of these scenarios to determine which one is the best.
In scenario 1
Periods= 10 years * 2= 20 periods (since rate is biannual)
Principal= $12,000
Rate= 8.2%
Using the formula
Interest= Principal * Rate * Time
Interest= 12,000* 0.082 * 20
Interest= $19,680
In scenario 2
Principal= $11,000
Rate= 10%
Period= 8 years ( two years have already passed, so we calculate for 8 years since we want to see gain after 10 years)
Interest= 11,000* 0.10 * 8
Interest= $8,800
So imvesting $12,000 at interest rate of 8.2% biannually for 10 years is a better option.Answer:
You are better off investing today in the mutual fund and earn 8.2 percent semiannually for 10 years.
Explanation:
We will need to calculate the interest generated in both of these scenarios to determine which one is the best.
In scenario 1
Periods= 10 years * 2= 20 periods (since rate is biannual)
Principal= $12,000
Rate= 8.2%
Using the formula
Interest= Principal * Rate * Time
Interest= 12,000* 0.082 * 20
Interest= $19,680
In scenario 2
Principal= $11,000
Rate= 10%
Period= 8 years ( two years have already passed, so we calculate for 8 years since we want to see gain after 10 years)
Interest= 11,000* 0.10 * 8
Interest= $8,800
So imvesting $12,000 at interest rate of 8.2% biannually for 10 years is a better option.
We appreciate your time. Please come back anytime for the latest information and answers to your questions. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.