Question
Rory won a $25 000 lottery and is considering investing his winnings. His two options are shown below: Option #1: Deposit $15 000 into a
Rory won a $25 000 lottery and is considering investing his winnings. His two options are shown below:
- Option #1:Deposit $15 000 into a high-interest savings account at 2.5% compounded annually for 8 years and invest the other $10 000 into a Guaranteed Investment Certificate which earns 5% interest compounded quarterly for a term of 8 years.
- Option #2:Purchase a 4 year $25 000 Canada Savings Bond (CSB) with a rate of 4% interest compounded monthly and then reinvest the money into his Tax Free Savings Account (TFSA) which earns 1.2% interest compounded semi-annually for the remaining 4 years.
Determine the future value of each investment by completing a chart or showing formula calculations:
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Statistical Techniques in Business and Economics
Authors: Douglas A. Lind, William G Marchal
17th edition
1259666360, 978-1259666360
