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You would like to invest $25,700 for one year and are considering two options. Investment A will earn interest at a rate of 9 percent
You would like to invest $25,700 for one year and are considering two options. Investment A will earn interest at a rate of 9 percent compounded monthly. Investment B will earn interest at a rate of 10 percent compounded annually. (Hint: Consider one year only.)
a. What will be the value of Investment A?
b. What will be the value of Investment B?
c. Which investment would you prefer solely based on the value of investment?
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