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Question 1 You are trying to choose among three investments described below: Investment A: Up-front investment of $45,000 and returns $120,000 in six years.
Question 1 You are trying to choose among three investments described below: Investment A: Up-front investment of $45,000 and returns $120,000 in six years. Investment B: Up-front investment of $60,000 and returns $8,000 per year forever. Investment C: Invest $10,000 per year for three years starting today and returns $15,000 each year for 10 years starting at the end of year 8. Prioritize the investments in the order of return. Question 2 R Bank pays 4% simple interest on its deposit account, whereas B Bank pays interest on its deposit account compounded monthly. Formulate the quoted and effective interest rates that B Bank should set if it wants to match R Bank, assuming a 5-years horizon period.
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