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11. You want to invest $2,500 at your local bank for five years. The banker gives you two investment options. Option 1: You can invest
11. You want to invest $2,500 at your local bank for five years. The banker gives you two investment options. Option 1: You can invest in a special account that pays you 5% interest each year. However, the interest in this account will not compound. Instead, each year the interest payment is put into a special account which collects no further interest and cannot be reinvested anywhere until the end of the five years. Option 2: You can invest in a regular bank account that pays you 4.5% interest each year with compounding interest. That is, each year the interest you earn gets deposited in your bank account and earns interest until the end of the five years. Which option should you select and why? A) Select Option 1: it earns you $9.55 more than Option 2. B) Select Option 1: it earns you $62.50 more than Option 2. C) Select Option 2: it earns you $9.55 more than Option 1. D) Both options earn you the same amount of money so you are indifferent between the two
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