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Nicholai is willing to invest $40,000 for six years, and is an economically rational investor. He has identified three investment alternatives (A, B, and C)
Nicholai is willing to invest $40,000 for six years, and is an economically rational investor. He has identified three investment alternatives (A, B, and C) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the six-year investment period, complete the following table and indicate whether Nicholai should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is earned annually. The final value should be rounded to the nearest whole dollar. Make this investment? Expected Future Value Yes No Investment Interest Rate and Method A 9% simple interest B 4% compound interest 6% compound interest
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