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$\frac{1}{2}$

$100\%$

triOS COLLEGE

BUSINESS $$ TECHNOLOGY $*$ HEALTHCARE

Assignment $1$ Questions Template

Part $1$: Solve the following questions based on Simple and Compound Interest:

Question $1$

Sun Life Financial Trust offers a $360-$day short$-$term GIC at $0\mathrm{.}65\%.$ It also offers a $120-$day short$-$term GIC at $0\mathrm{.}58\%.$ You are considering either the $360-$day GIC or three consecutive $120-$day GICs.

For the $120-$day GICs, the entire maturity value would be "rolled over" into the next GIC. Assume that the posted rate increases by $0\mathrm{.}1\%$ upon each renewal.

If you have $$115,000$ to invest, which option should you pursue and how much more interest will it carn?