You have extra $5,000 to invest. You do not need the money now but will need...

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Economics

You have extra $5,000 to invest. You do not need the money nowbut will need it after 3 years, so you plan to cash your investmentat the end of 3 year. Usually your investments earn 7% annualinterest compounded annually and youâ€™d like to consider it as yourminimum acceptable rate of return. You are considering severalinvestment opportunities: Option 1. Depositing your money on thehigh interest savings account that earns 0.58% interest each month.Option 2. Buying and holding a stock that grows 10% per year.Option 3. Making a personal loan of $5000 to a friend and receiving$400 per year. Select the best option and explain why.

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Value of 5000 7 rate of return after 3 years FV 500010073 6125215 Option 1 Amount invested 5000 Interest rate per month 058 or 00058 Number of months in 3 See Answer

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