Question
The bank has a promotion of either: $100 deposit and earn 35% interest for 3 years OR $450 deposit and earn 13% for 1 year
The bank has a promotion of either: $100 deposit and earn 35% interest for 3 years OR $450 deposit and earn 13% for 1 year 1) Which investment option is the option (ignoring reinvestment after year 1)? Assume a market rate of 10%. 2) Explain when would you be indifferent to either option (ignoring reinvestment after year 1)?
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Public Finance A Contemporary Application of Theory to Policy
Authors: David N Hyman
11th edition
9781305474253, 1285173953, 1305474252, 978-1285173955
