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1. Suppose you have $10,000 to put into a savings vehicle. Will you be better off putting the $10,000 in an account with a 4%
1. Suppose you have $10,000 to put into a savings vehicle. Will you be better off putting the $10,000 in an account with a 4% annual rate, compounded quarterly, or buying an asset priced at $10,000 that promises to pay you $25,000 in 20 years, assuming the terms of the account do not change? Fill in the answer blank with either account or asset. 2. Which loan results in the lowest total interest cost to the borrower? Loan A: $1,000 loan at 6.5% annual simple interest for 4 years Loan B: $1,000 loan at 6% annual compound interest for 4 years Answer: Loan results in the lowest cost to the borrower. Answer all 2 Parts
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