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COMPARISON #3 Monthly payments of $500 with an annual interest rate of 6%...

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Finance

COMPARISON #3

Monthly payments of $500 with an annual interest rate of 6% compounded monthly.

Monthly payments of $1000 with an annual interest rate of 6% compounded monthly.

Select the better option (the least amount of total interest paid)

$500 or $1000

Why might someone choose the other option in this case?

image

PART 3 - Annuities - Comparing payment AMOUNT 14 Financial calculator $500 COMPARISON #3 Present Value 32,000 Payment Amount -$500 Monthly payments of $500 with an annual interest rate of 6% compounded monthly. Future Value 0 Monthly payments of $1000 with an annual interest rate of 6% compounded monthly. Annual Interest rate Periods (number of payments) Compounding Monthly Select the better option (the least amount of total interest paid) Calculate Total Interest paid: $500 $1000 $1000 Why might someone choose the other option in this case? Present Value 32,000 Payment Amount -$1000 Future Value 0 Annual Interest Rate Periods (number of payments) Submit Compounding Monthly Calculate Total Interest paid: PART 3 - Annuities - Comparing payment AMOUNT 14 Financial calculator $500 COMPARISON #3 Present Value 32,000 Payment Amount -$500 Monthly payments of $500 with an annual interest rate of 6% compounded monthly. Future Value 0 Monthly payments of $1000 with an annual interest rate of 6% compounded monthly. Annual Interest rate Periods (number of payments) Compounding Monthly Select the better option (the least amount of total interest paid) Calculate Total Interest paid: $500 $1000 $1000 Why might someone choose the other option in this case? Present Value 32,000 Payment Amount -$1000 Future Value 0 Annual Interest Rate Periods (number of payments) Submit Compounding Monthly Calculate Total Interest paid

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