An investor has the choice of two investments. Investment A offers interest at 7.25% compounded quarterly. Investment B offers interest at the annual rate of 7.40%. Which investment offers the higher dollar return on an investment of $50,000 for two years, and by how much?
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A) |
Investment B offers a $36.92 greater return. | |
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B) |
Investment A offers a $122.18 greater return. | |
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C) |
Investment A offers a $53.18 greater return. | |
Investment A: I = 7.25 / 4; N = 2 × 4 = 8; PV = $50,000; PMT = 0; CPT → FV = $57,726.98
Investment B: I = 7.40; N = 2; PV = $50,000; PMT = 0; CPT → FV = $57,673.80
Difference = investment A offers a $53.18 greater dollar return.
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发表于 2011-2-28 15:27
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