Instruction: Use 2 decimal places only. If you are offered the following investm
ID: 2817930 • Letter: I
Question
Instruction: Use 2 decimal places only. If you are offered the following investment opportunity, which option will you choose for the best interest earned if you can afford to invest a total of 20,000? You can invest multiple times in an option based on your available fund (20,000).Option 1, Principal is 10,000.00pesos, rate is 3% and term is 9 months, how much interest I earned if I have invested 20,000pesos? Option 2, Principal is 5,000pesos, rate is 2% and term is 1 year, how much interest I earned if I have invested 20,000pesos? Option 3, Principal is 20,000pesos, rates is 8%, and term is 4 months, how much interest I earned if I have invested 20,000pesos? Option 4, principal is 4,000pesos, rate is 1% and terms is 2.5 years, how much interest I will earned if I have invested 20,000pesos? Whic option is best to use? PS. if you will not optimize your fund of 20,000( for each option)you will arrive at a wrong answer.
Explanation / Answer
Option 1:
Interest Income = Principal * Time * Interest Rate / 100
Interest Income = 20000 * 9 / 12 * 3 / 100
Interest Income = $450
Option 2:
Interest Income = Principal * Time * Interest Rate / 100
Interest Income = 20000 * 12 / 12 * 2 / 100
Interest Income = $400
Option 3:
Interest Income = Principal * Time * Interest Rate / 100
Interest Income = 20000 * 4 / 12 * 8 / 100
Interest Income = $533.33
Option 4:
Interest Income = Principal * Time * Interest Rate / 100
Interest Income = 20000 * 12 / 30 * 1 / 100
Interest Income = $80
The Investment option which provides highest interest income is Option 3 which gives $533.33 per 4 months and a total of $1600 for a year