Using the online TVM Calculator https://www.fncalculator.com/financialcalculator?type=tvmCalculator , answer the following questions: 

 

a. Suppose you had $3000 to invest into an account that pays 3.5%compounded monthly for 10 years. Fill in the table below and use the calculator to determine the amount in the account after the 10 years.

 

Principal Amount Invested	Interest Rate	Compound Frequency	Number of years	Future Value

b. Determine the total amount of interest that you made on this investment. Show your calculations.

Remember: Interest = Future Value - Principal Amount

c. Suppose you had the option of compounding monthly OR compounding weekly. Which option would you choose and why?

Question 2

Using the online TVM Calculator link above, answer the following question.(Make the calculations clear as well)

You have $1500 to invest. A financial advisor is offering you the following two products for your investment:

Product 1: a GIC at 5.5% compounded monthly for 20 years

Product 2: a TFSA at 8.5% compounded annually for 20 years

automatically want to take the product with a higher interest rate but then notice that they are compounded differently. You're not quite sure whether the 3% difference is large enough to make more interest than compounding more frequently.

1. Make a prediction as to which product is going to earn the most interest and why

Product 1 or 2?	Why?

1. Use the TVM Calculator to determine the future value of each product. Write the answers in the table and state which product is better based on the findings.

	Future Value
Product 1
Product 2

Product choosen: _________

1. Determine the amount of interest earned by each product. Show calculations in the table.

	Interest Calculation	Interest Earned
Product 1
Product 2

1. How muchmore interest was earned by choosing the above Product? Show calculations.

1. The interest rates only differed by 3% between products. Based on interest calculations, what are the observation? Is this information useful for someones financial decision-making in the future?