Question

A person wants to invest $24,000 for 2 years and is considering two different investments. The first investment, a money market fund, pays a guaranteed 6.6% interest compounded daily. The second investment, a treasury note, pays 6.8% annual interest. Which investment pays the most interest over the 2-year period? Choose the correct answer below. in interest. in interest, and the treasury note pays s in interest, and the treasury note pays s O A. The market fund is the botter investment, since the market fund produces s OB. The treasury note is the better investment, since the market fund produces s OC. Both the market fund and the treasury note produce the same interest with $ (Round to the nearest cent as needed.) in interest.

Answer 1

Fv= Future Value Present value interest rate no.of years Money Market Fund Interest= PV*((1+i/365)^(n*365)-1) Treasury Bond interest PV*(1+i)^(n) Daily Annually 24000*((1+0.066/365)^(2*365)-1) 24000*((1+0.068)^2-1) 3,386.27 3,374.98 Answer A