Hi I’m confused about these questions could you help me? Please! PART A: SAVING YOUR MONEYAlfred wants to save money for new car. He estimates that he will need $14 000. He has 2 years to save hismoney.Option 1: 5.25% per year, compounded biweekly.Option 2: 6.00% per year, compounded monthlya) Calculate the payment amount for each option. (AP - 6)PVPMTFVRatePeriodsCompoundingAmount:=====OPTION 1140005.25%biweeklyOPTION 2PVPMTFVRatePeriodsCompoundingAP:=b) Which investment should he choose? Justify your answer. (TH-2)====16Amount:TH:/2

Future value The value of an investment after a certain time in the future date at a given interest…

a) Calculate the payment amount for each option. (AP - 6) OPTION 1 PV PMT FV Rate Periods Compounding Amount: = 11 = = II II 14000 5.25% biweekly OPTION 2 PV PMT FV Rate Periods Compounding = = 11 = = 11 = 11 Amount:

a) Calculate the payment amount for each option. (AP - 6) OPTION 1 PV PMT FV Rate Periods Compounding Amount: = 11 = = II II 14000 5.25% biweekly OPTION 2 PV PMT FV Rate Periods Compounding = = 11 = = 11 = 11 Amount:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Hi I’m confused about these questions could you help me? Please!

PART A: SAVING YOUR MONEY
Alfred wants to save money for new car. He estimates that he will need $14 000. He has 2 years to save his
money.
Option 1: 5.25% per year, compounded biweekly.
Option 2: 6.00% per year, compounded monthly
a) Calculate the payment amount for each option. (AP - 6)
PV
PMT
FV
Rate
Periods
Compounding
Amount:
=
=
=
=
=
OPTION 1
14000
5.25%
biweekly
OPTION 2
PV
PMT
FV
Rate
Periods
Compounding
AP:
=
b) Which investment should he choose? Justify your answer. (TH-2)
=
=
=
=
16
Amount:
TH:
/2

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