Question

A person wants to invest $16,000 for 2 years and is considering two different investments. The first investment, a money market fund, pays a guaranteed 5.3% interest compounded daily. The second investment, a treasury note, pays 5.5% annual interest. Which investment pays the most interest over the 2-year period? Select the correct choice below and, if necessary, fill in any answer box(es) to complete your choice. (Do not round until the final answer. Then round to the nearest cent as needed.) O A. Both the market fund and the treasury note produce the same interest with S OB. The treasury note is the better investment, since the market fund produces s in interest, and the treasury note pays s in interest, and the treasury note pays $ in interest In interest O C. The market fund is the better investment, since the market fund produces s and number Which one (A, B, C

Answer 1

solo given invest 5.3% 5.5% fund = $ 16,000 interst compound annual compound interest 53% interest.compounded dialy is equivalent = 1+00053 l. e 365 50.0525 - Money Market fund interest rate .. .. 0.05.25. The money market fund produce's 0546900.(1+0.05250) 12 1.65.000. E 1724 11 Treasury note producer for 5.5% J = 16000 t 8.855512 16,000 18084/1 option 'B' ir correct www.sap.com