$1.$ Consider two investments:

$$ Invest $$1000$ and receive $$110$ at the end of each month for the next $10$ months.

$$ Invest $$1200$ and receive $$130$ at the end of each month for the next $10$ months.

If this were your money, and you wanted to earn at least $12\%$ interest on it$,$ which investment would you make, if any? Solve the problem by annual cash flow analysis.

Answer:

Alternative $1$: EUAW $=$ $$4\mathrm{.}40$; Alternative $2$: EUAW $=$ $$3\mathrm{.}28$

$($Mention which alternative should be chosen and why$)$