Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. part 1 - concepts answer the following: 1. state s

Part 1 - Concepts Answer the following: 1. State some of the purposes of finance...

90.2K

Verified Solution

Question

Finance

image

Part 1 - Concepts Answer the following: 1. State some of the purposes of finance 2. Give an example of a risk and return relationship Part 2 - Interest Rate You have just received a bonus of 15,000 euros and have decided that you want to invest the money. After discussing your options with your bank, you have narrowed it down to two options: A. A savings account that provides 7% simple interest annually. B. A savings account that provides 6.25% compounded interest annually. Assume that the deposit is made in year 0 and payments are made at the end of periods with first payment end of year 1. Answer the following: 1. What is the difference between simple and compounded interest? 2. You have decided to leave the money in the account for 12 years. Which option should you choose? 3. In which year does option B become more favorable than option A? Show your calculations

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students