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1. Prithi needs to have $ 150,000 in 5 years to achieve her housing dream. She has $100,000 in her account now and considering
1. Prithi needs to have $ 150,000 in 5 years to achieve her housing dream. She has $100,000 in her account now and considering following options for investment. Option 1: Putting an equal amount of money into Star Investment Fund at the end of each week for 5 5 years to get $50,000 saved. The fund is offering a rate of return 8% per year, compounding weekly.(Ignore the possible interest income on $100,000) Option 2: Invest $100,000 in an one of the following assets in financial market for 5 years. | Asset A pays a rate of return of 9.5% per year, compounding semi-annually. Asset B pays a rate of return of 9.45 per year, compounding quarterly. Required: 1. Calculate the weekly contribution into Star Investment Fund to get $50,000 after 5 years in Option. 2. Based on effective annual interest rate (EAR), identify the best alternative out of the two assets given under option 2. 3. Calculate Amina's total wealth at the end of 5 years if she choose assets B in option 1.
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