Question

You are trying to choose between two accounts. Both have the same interest rate, but one is a simple interest account and the
0 0
Add a comment Improve this question Transcribed image text
Answer #1

In Compound interest account, interest will be calculated on interest of first year onwards. In Simple interest account, inte

Add a comment
Know the answer?
Add Answer to:
You are trying to choose between two accounts. Both have the same interest rate, but one...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • You have two saving accounts, one with a nominal interest rate of 5% and the other...

    You have two saving accounts, one with a nominal interest rate of 5% and the other with a nominal interest rate of 7%, and both are compounded twice a year. At the end of 10 years, the total in the two accounts is $1000. At the end of 20 years, the amount in the first account is twice the amount in the second account. What is the total in the two accounts after 5 years?

  • 4. Two accounts with the same quoted annual interest rate (APR) would have: A) same effective...

    4. Two accounts with the same quoted annual interest rate (APR) would have: A) same effective annual rate (EAR) if they have different compounding periods in a year B) same effective annual rate (EAR) ifthey have same compounding periods in a year C) same effective annual rate (EAR) if one compounds the interest more often than the other D) different effective annual rate (EAR) if they have same compounding periods in a year

  • Problem 10.21 You are trying to choose between purchasing one of two machines for a factory....

    Problem 10.21 You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,300 to purchase and has a three-year life. Machine B costs $17,200 to purchase but has a four-year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose? Assume a marginal tax rate of 35 percent and a discount rate of 15 percent. (Round answers to...

  • You're trying to choose between two different investments, both of which require you to invest $68,000...

    You're trying to choose between two different investments, both of which require you to invest $68,000 today. Investment G would pay you $122,400 7 years from today. Investment H would pay you $174,080 11 years from today. Required: What is the annual rate of return (or interest rate) on each of these two investments? (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16)) Interest rate Investment G Investment H %

  • Problem 10.21 You are trying to choose between purchasing one of two machines for a factory....

    Problem 10.21 You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,500 to purchase and has a three-year life. Machine B costs $17,400 to purchase but has a four-year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose? Assume a marginal tax rate of 35 percent and a discount rate of 15 percent. (Round answers to...

  • Problem 10.21 You are trying to choose between purchasing one of two machines for a factory....

    Problem 10.21 You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,500 to purchase and has a three-year life. Machine B costs $17,400 to purchase but has a four-year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose? Assume a marginal tax rate of 35 percent and a discount rate of 15 percent. (Round answers to...

  • please answer all of the following questions 1. Which following statement is true, assuming an interest rate of gre...

    please answer all of the following questions 1. Which following statement is true, assuming an interest rate of greater than 0%: a. The present value of a dollar to be received one year from today is ALWAYS worth less than one dollar. b. The present value of a dollar to be received one year from today is ALWAYS worth more than one dollar. c. The present value of a dollar to be received one year from today is ALWAYS equal...

  • You won the lottery, and can choose one of two (guaranteed) payments: Choice A pays $5,000,000...

    You won the lottery, and can choose one of two (guaranteed) payments: Choice A pays $5,000,000 today; Choice B pays $350,000 at the end of the next 20 years (first payment is one year from today). A. If the discount rate is 5%, which option should you choose? B. If the discount rate is 2%, which option should you choose? C. At what discount rate would you be indifferent between these two choices? (Hint: When will the two choices have...

  • You’re trying to choose between two different investments, both of which have up-front costs of $102,000....

    You’re trying to choose between two different investments, both of which have up-front costs of $102,000. Investment G returns $167,000 in 7 years. Investment H returns $287,000 in 14 years. Calculate the rate of return for each these investments. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) You're trying to choose between two different investments, both of which have up-front costs of $102,000. Investment G returns $167,000 in 7...

  • Two mutually exclusive projects have the same IRR. When will you be indifferent between them? Multiple...

    Two mutually exclusive projects have the same IRR. When will you be indifferent between them? Multiple Choice A. When the IRR is equal to the cost of capital. B. Always if they have the same IRR. C. When the IRR is less than the cost of capital. D. When there is only one change in the sign of the cash flows.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT