Please answer the following concept questions Concept Practice Includes Concepts related to Simple vs Compound Interest, PV, FV, rates and time (Think You do not need to calculate the exact numbers for concept questions 5 points for each question ) Highlight or mark your answer in the columns to the right (Note A B means that A and B are of the same value ) A and B make $1,000 deposits into an account that earns 7 A takes his money out in 5 years B withdraws her money in 8 years Whose withdrawal is greater A B A B An account that earns simple interest will always have a lower future value than one that earns compound interest True False Account A pays 1 compounded monthly Account B pays 12 compounded annually Which one should you choose A B A B When you are borrowing, you prefer higher rates, when you are investing you prefer lower rates True False You are considering 2 investments Investment A will pay you $100 in 1 year and $1000 in 3 years Investment B will pay you $100 in 1 year, $500 in two years and $500 in three years Which one do you prefer A B A B Savings account A and B pay 3 interest per year Account A pays simple interest, account B compounds annually In which account should you deposit your money if you plan to invest it for 5 years A B A B If you are investing for one period, you are indifferent between a simple interest and a compound interest account True False If you are investing for more than one period, you should choose the compound interest account True False A and B would like to save up $10,000 A will invest in an account that earns a 1 monthly rate B will invest in an account that earns 12 per year Which one will have $10,000 first A B A B A deposited $1,000 into an account and it grew to $1,300 B deposited $900 into an account and it grew to $1,300 If both invested for the same length of time, who earned the higher rate of interest A B A B Investment A will pay $100 in 1 year, $200 in 2 years and $300 in 3 years Investment Be will pay $300 in 1 year, $200 in 2 years and $100 in 3 years All else equal, which one will have the higher future value A B A B Investment A will pay $100 in 1 year, $200 in 2 years and $300 in 3 years Investment B will pay $300 in 1 year, $200 in 2 years and $100 in 3 years All else equal, which one will have the higher present value A B A B

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 05, 2024

Please answer the following concept questions. Concept Practice Includes Concepts related to Simple vs Compound Interest, PV, FV, rates and time. (Think. You do not

Please answer the following concept questions.

Concept Practice Includes Concepts related to Simple vs Compound Interest, PV, FV, rates and time. (Think. You do not need to calculate the exact numbers for concept questions. 5 points for each question.)

Highlight or mark your answer in the columns to the right. (Note: A=B means that A and B are of the same value.)

A and B make $1,000 deposits into an account that earns 7%. A takes his money out in 5 years. B withdraws her money in 8 years. Whose withdrawal is greater?	A	B			A=B
An account that earns simple interest will always have a lower future value than one that earns compound interest.	True		False
Account A pays 1% compounded monthly. Account B pays 12% compounded annually. Which one should you choose?	A	B			A=B
When you are borrowing, you prefer higher rates, when you are investing you prefer lower rates.	True		False
You are considering 2 investments. Investment A will pay you $100 in 1 year and $1000 in 3 years. Investment B will pay you $100 in 1 year, $500 in two years and $500 in three years. Which one do you prefer?	A	B			A=B
Savings account A and B pay 3% interest per year. Account A pays simple interest, account B compounds annually. In which account should you deposit your money if you plan to invest it for 5 years?	A	B			A=B
If you are investing for one period, you are indifferent between a simple interest and a compound interest account.	True			False
If you are investing for more than one period, you should choose the compound interest account.	True			False
A and B would like to save up $10,000. A will invest in an account that earns a 1% monthly rate. B will invest in an account that earns 12% per year. Which one will have $10,000 first?	A	B			A=B
A deposited $1,000 into an account and it grew to $1,300. B deposited $900 into an account and it grew to $1,300. If both invested for the same length of time, who earned the higher rate of interest?	A	B			A=B
Investment A will pay $100 in 1 year, $200 in 2 years and $300 in 3 years. Investment Be will pay $300 in 1 year, $200 in 2 years and $100 in 3 years. All else equal, which one will have the higher future value?	A	B			A=B
Investment A will pay $100 in 1 year, $200 in 2 years and $300 in 3 years. Investment B will pay $300 in 1 year, $200 in 2 years and $100 in 3 years. All else equal, which one will have the higher present value?	A	B			A=B