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You are planning to invest $5000 and the financial manager from the Westpac bank gives you the following investments to consider Investment 1: $1500 paid
You are planning to invest $5000 and the financial manager from the Westpac bank gives you the following investments to consider
- Investment 1: $1500 paid every year for 5 years, with the first payment to be received at the end of year 2
- Investment 2: $600 paid semiannually for 5 years
- Investment 3: $100 paid at the end of first quarter and it will grow 1% quarterly forever
- What is the annual percentage rate of return of each investment?
- Calculate the effective annual rate of return of each investment.
- Which investment should you choose? Show all steps, no excel methods
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