Assume you needed $10 000 on April 1, 2016, and two options were available:
(a) Your banker would lend you the money at an annual interest rate of 7.0 percent, compounded monthly, to be repaid on September 1, 2016.
(b) You could cash in a certificate of deposit (CD) that was purchased earlier. The cost of the CD purchased September 1, 2015, was $10 000. If left in the savings and loan company until September 1, 2016, the CD’s annual interest is 3.8 percent compounded monthly. If the CD is cashed in before September 1, 2016, you lose all interest for the first three months and the interest rate is reduced to 1.9 percent, compounded monthly, after the first three months.
Which option is better and by how much? (Assume an annual rate of 3.6 percent, compounded monthly, for any funds for which an interest rate is not specified.)
 ANSWER.png)
You might also like to view...
Commercial cost databases do not accurately reflect a particular contractor's costs.
Answer the following statement true (T) or false (F)
A cable runs 72 ft. 3 in.? from a low-head hydro system. Express this distance in ft.
Fill in the blank(s) with the appropriate word(s).
Describe the process of nodule formation in legumes
What will be an ideal response?
The mass of a person on the moon is 1/6 the mass of the same person on the earth.
Answer the following statement true (T) or false (F)