Question

# Consider two investments: Invest \$1000 and receive \$110 at the end of each month for the...

Consider two investments:

1. Invest \$1000 and receive \$110 at the end of each month for the next 10 months.
2. Invest \$1200 and receives \$130 at the end of each month for the next 10 months.

If this were your money, and you want to earn at least 12% interest on your money, which investment would you make, if any?    Solve by Present Worth Analysis or Annual Worth analysis. State your analysis method and explain why you used that method.

(show all equations used)

#### Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
• ### 8. Consider the following two investment options: (1) Invest \$1,000 and receive \$110 at the end...

8. Consider the following two investment options: (1) Invest \$1,000 and receive \$110 at the end of each month for the next 10 months. (2) Invest \$1,200 and receive \$130 at the end of each month for the next 10 months. If this were your money, and you want to earn at least 12% interest on your money, which investment would you make, if any? Determine which alternative should be selected, based on Net Present Worth (NPW). Show all of...

• ### Question 10 of 13 a. How much money do you need to invest to receive \$2,300...

Question 10 of 13 a. How much money do you need to invest to receive \$2,300 at the end of each month for 15 months if you can earn 5.0% compounded monthly? \$0.00 Round to the nearest cent b. If you would like your payments to last you 20 months, how much less would you have to receive at the end of each month if you invested the same amount as above and the interest rate was the same? Round...

• ### There are three options of investment: If you invest 1000 now, you will receive 375 each...

There are three options of investment: If you invest 1000 now, you will receive 375 each at the end of next three years. If you invest 1000 now, you will receive 1080 at the end of 1st year. If you invest 1000 now, you will receive 1100 at the end of 2nd year. Risk-free interest rate is assumed to be 5%. Would you invest any of them? Why? Which one would you pick?    Why?

• ### Instead of spending the \$50 a month you receive, you decided to invest it in your...

Instead of spending the \$50 a month you receive, you decided to invest it in your money market account at your bank. Assuming you will earn an average of 5% each year and inflation is forecasted to 2.5% a year, how much have you effectively earned after ten years? (Hint: must use a two formulas to solve this question) In other words, after you have factored out the effects of inflation, how much purchasing power do you have? Show all...

• ### A: You invest \$20 at the beginning of each month into stocks that are expected to...

A: You invest \$20 at the beginning of each month into stocks that are expected to earn 12% per year. How much will your investment be worth in 20 years? B: You are needing to borrow money to buy textbooks. Which of the following options is the best choice? A) Bank loan with a 19% APR, compounded annually B) Credit Card with a 18% APR, compounded monthly C) Credit Card with a 18%, APR, compounded daily D) Bank loan with...

• ### Your cable bill is \$122 per month (starting next month) If your investments earn 4.00% APR...

Your cable bill is \$122 per month (starting next month) If your investments earn 4.00% APR (compounded monthly) how much would you have to invest today to have your investment justc worth of cable service over 12 months

• ### M. Gordon plans to invest \$600 at the end of each month in an account that...

M. Gordon plans to invest \$600 at the end of each month in an account that pays 12%, compounded monthly. After how many months will the account be worth \$50,000? (a) State whether the problem relates to an ordinary annuity or an annuity due O ordinary annuity annuity due (1) Solve the problem. (Round your answer Up to the nearest month.) months

• ### How much must you invest today in order to receive \$10,000 at the end of each...

How much must you invest today in order to receive \$10,000 at the end of each year for the next 8 years assuming you can earn 5 percent interest? Please use the table provided under the EC Time Value of Money Module otherwise you may be marked wrong due to rounding.

• ### You receive \$4,000 from your aunt when you turn 21 and you immediately invest the money...

You receive \$4,000 from your aunt when you turn 21 and you immediately invest the money in a saving account. The account earns 12% annual rate, with continuous compounding. You get your first job after 5 years. a. Determine the accumulated saving in this account at the end of 5 years. b. You want to retire from work in 20 years. If you deposit \$100 into your account every month for the first 10 years, and \$200 every month for...

• ### Your cable bill is \$122 per month (starting next month) If your investments earn 3.00% APR...

Your cable bill is \$122 per month (starting next month) If your investments earn 3.00% APR (Compounded monthly), how much would you have to invest today to have your investment just cover 12 months worth of cable service. \$1,412 \$1,469 \$1,440 \$1,239 \$1,214