Which of the following investments would have the highest future value at the en
ID: 2681622 • Letter: W
Question
Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual rate for all investments is the same and is greater than zero.Answer
Investment A pays $250 at the beginning of every year for the next 10 years (a total of 10 payments).
Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments).
Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments).
Investment D pays $2,500 at the end of 10 years (just one payment).
Explanation / Answer
Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments).