Answered: Which account is better for Zulfa, and…

Business

Finance

Which account is better for Zulfa, and why? Select the answer that is completely correct.

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

See similar textbooks

Related questions

Q: manager of an automobile dealership is considering a new bonus plan designed to increase sales volum...

A: Hypothesis testing is a technique which helps in the the testing of the sample and draw inferences f...

Q: tax. Calculate the total cost to rent the equipment shown in the table for 3 months.

A: Calculation of total cost of rent for three months: Given information, Rental cost per month: 10% ...

Q: The aggregate expenditure for a simple economy in 2016 was $9 million. The table below shows spendin...

A: First, we will calculate the aggregate expenditure of the government which includes Consumption, Inv...

Q: Macaulay duration and the modified duration

A: Given information: Period: 2 year Face value: $1,000 Coupon rate: 6% Coupon amount semiannual: $1,0...

Q: At what rate converted annually will make Php 3,253 accumulate to Php 3,982 in 4 years? Please ans...

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified...

Q: 4) The interest rate on conventional 1-year Treasury bonds is 7% and the interest rate on 1-year TIP...

A: The one-year treasury bond and the one-year TIPS: The one-year treasury bond is usually sold at a di...

Q: Compute the equity dividend rate for the following investment: • Acquisition price $1,500,000 • Firs...

A: Here, Acquisition Price is $1,500,000 Potential Gross Income (PGI) is $300,000 Vacancy and collectio...

Q: (Measuring growth) Given that a firm's return on equity is 22 percent and management plans to retain...

A: Return on equity = 22% Retention ratio = 35%

Q: Assess the following statements: I. The traditional liquidity premium theory states that long term i...

A: we will analyze the above Stamets then we check the accuracy of whether each of the statements is co...

Q: 5.1 Annuity Period As you inc case the length to the present value of an annuity? What happens to th...

A: Present value- It is the current value of the future sum of cash flow at a given rate of return. For...

Q: A zero-coupon bond is a debt instrument that offers no return on investment. A True B False

A: Since multiple questions are asked we will answer 1st question for you as per prescribed guideline...

Q: You borrow $1,000 from the bank and agree to repay the loan over the next year in 12 equal monthly p...

A: We can calculate the effective annual interest rate by applying the required formula taking the loan...

Q: 1. Consider the costs and benefits of the following public projects shown in the table. Costs ($) Ye...

A: Benefit-cost Ratio is the relationship between benefits and costs. It is recommended to go with one ...

Q: What is the ordinary interest on P1,350.75 for 163 days at 3.5%? php?

A: Ordinary interest is calculated on the basis of 360 days a year or 30 days a month whereas exact int...

Q: You are considering either leasing or purchasing a car. You notice an ad that says you can lease the...

A: Lease is a contract between two parties in which one party gives right to use of asset to another pa...

Q: Given four proposals for funding a new project with a 100M limit on capital funding and the MARR is ...

A: Here,

Q: Present Value and Multiple Cash Flows Investment X offers to pay you $3,100 per year for 9 years, wh...

A: Investment X annual payment (X) = $3100 for 9 year (n = 9) Investment Y annual payment (Y) = $4800 f...

Q: PIX company is considering licensing a water treatment system. The company can purchase a one-year o...

A: Capital budgeting is the process by which a corporation examines potential large projects or investm...

Q: Use the savings plan formula to answer the following question. A friend has an IRA with an APR of 6....

Q: Assess the following statements: I. If the yield curve is upward sloping, some investors may attempt...

A: Riding the yield curve is a strategy of trading in which the investors buy bond which has longer mat...

Q: If the compounded interest rate on 75 days time deposit is %16, calculate the simple rate?

A: Simple interest is a method of calculating the proportion of interest paid on an amount over a certa...

Q: WHAT ARE THE TYPES OF FINANCIAL STATEMENTS?

A: Financial statements Financial statements are referred to as written records that are used in convey...

Q: Suppose an investor buys 20 share of a particular stock at R10 per share and sell them all a year fr...

A: Total buying price = 20 * R 10 = R 200 There is a 0.2 probability that price will be 0 There is a 0....

Q: Assess the following statement: I. Money markets exist to help reduce the opportunity cost of holdin...

A: Dealing in debt with a maturity of less than one year is referred to as the money market. Government...

Q: Ali, Ahmad and Sam shared and bought a Play Station III for RM1500. Each of them took turns to keep ...

A: In partnership each partner have equal rights and equal responsibility and shared equally among all ...

Q: Suppose a principal of 2500 Rials accumulated to 4000 Rials over a period of 8 years. Determine the ...

A: The nominal rate can be computed with the help of future value function and logarithm values. Futur...

Q: A proposal to reduce oil spill on MX5 has a B-C ratio of 1.5. The conventional annual worth of benef...

A: Annual benefit (X) = P 560000 Annual disbenefit (Y) = P 100000 r = 6% n = 20 years Let F = First cos...

Q: and now spent a total of $35 on a combination of small and large coffees in march, how many small an...

A: Selling price can be defined as the price which a customer pays for something. It includes both cost...

Q: Genesis wants to invest his money in a fast food restaurant. There is a 38% chance of losing Php 400...

A: Computation of expected profit or loss Probability Profit/( loss) Expected profit / (loss) 0....

Q: The one-year spot rate is 11 percent and the two-year spot rate is 8 percent. What is the price of a...

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...

Q: lending of things/money to individuals or organizations that is expected to be paid back on acertain...

A: The term loan can be defined as the monetary assistance given to the borrower by a lender in conside...

Q: How insurance companies works?

A: Insurance companies are the type of organizations that were established in order to cover the unexpe...

Q: any remaining debt at a specified time Regular Payment Outstanding Balance Loan Mortgage O O SLIDESM...

A: Debt means money borrowed from one person or another in exchange of payment of principal amount and ...

Q: 1. Discuss the functions of financial intermediaries.

A: Financial intermediaries refer to those institutions and entities that serves the role of acting as ...

Q: The exact simple interest of P7,000 invested from April 28, 2002 to December 25, 2002 is P700. What ...

A: Interest amount (i) = P700 Investment (P) = P7000 Period from Apr 28, 2002 to Dec 25, 2002 (t) = 241...

Q: A man borrowed Php 120,000 and promised to pay annually for 5 years The payment starts at "X pesos a...

A: Loan amount (LV) = Php 120,000 Number of annual payments (N) = 5 Interest rate (I) = 8% Annual growt...

Q: What will be the price of a bond in which the YTM is higher than the coupon rate? a. Below face val...

A: The bond value can be determined looking at the relationship of coupon rate and YTM. If the YTM of ...

Q: Given four proposals for funding a new project with a 100M Ilimit on capital funding and the MARR is...

A: Internal rate of return is the rate at which the net benefits are equal to the net costs. If the IRR...

Q: Why aren't more resources committed to proper financial system prudential oversight to curb excessiv...

A: Deception with the goal of securing an unlawful profit for the perpetrator or depriving a victim of ...

Q: deposits per deposit was Php 20,000 and each deposit thereafter was 2,000 les the preceding one. Det...

A: We need to find the future value of all deposits at the end of the 6th year as the sixt deposit will...

Q: TSC, Inc. sells for $24 and pays an annual per share dividend of $2.10, which you expect to grow at ...

A: We will have to use the dividend discount model here.

Q: An individual makes five annual deposits of Php 2,000 in a savings account that pays interest at a r...

A: We will have to use the concept of time value of money here to find the amount withdrawn.

Q: method of paying a loan (principal and interest) on installament basis, usually of equal amounts at ...

A: Requirement of question ÷ Method of paying loan on installment basis, usually of equal amount at reg...

Q: Why insurance companies important for individuals?

A: A for-profit, non-profit, or government-owned firm that provides the promise to pay for particular e...

Q: savings account more liquid than a CD

A: A CD or certificate of deposit and savings account are two types of are offered by banks and financi...

Q: what should be the price of this European put option

A: Options are kind of derivative instruments. That is value of options is derived from the value of so...

Q: Net margin is 30% of the gross sales of 150,000. With Cost of Goods Sold amounting to 50,000, what p...

A: Net margin = 30% Gross sales = 150000 COGS = 50000

Q: Given: P= Php 450, 500. 50 r= 3 %% t= October 20, 2003 - February 10, 2004 Solve for: _1. Approximat...

A: Actual no of days and Approximate no of days: Actual no of days is calculated by taking actual dif...

Q: 1 You deposit P10 000 into a 9% account today . At the end of two years , you will deposit P30 000 ....

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: Suppose you inherited P100, 000 and invested it at 7% per year. What is the most you could withdraw ...

A: The amount of withdrawal can be calculated by dividing the present value of investment by the presen...

Question

Zulfa has money to invest in one of two accounts.
Account 1 requires an $800 investment for 1 year. It earns 4.8% interest compounded daily.
Account 2 requires an $810 investment for 2 years. It earns 2.5% interest compounded quarterly. It also has a one-time administrative fee of $10.
Zulfa's goal is to invest in the account with the best return on investment with no limit on time.
Which account is better for Zulfa, and why?
Select the answer that is completely correct.
Account 2 is better because its ROI is 5.1%, approximately 0.2% greater than the ROI for Account 1.
Account 2 is better because the profit is $41.40, about $2.07 more than the profit for Account 1.
Either account is a good investment because both earn about $40 in interest.
Account 1 is better because its ROI is 4.9%, approximately 1% greater than the ROI for Account 2.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Trending now

This is a popular solution!

Step by step

Solved in 7 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Jane has a credit card balance of $21,000. The annual interest rate is 20%. She is required to pay a minimum of 4% of the outstanding balance, but never less than $40. How many months will it take to pay off the credit card balance if she pays $25 in addition to the required minimum payments? You must show your work on an Excel spreadsheet and place in the designated dropbox. 119 163 102 201
Natasha has an investment account that earns 6.45% compounded monthly. Amanda has an investment account that earns 6.05% compounded semiannually. Compute the effective rate that Natasha and Amanda are receiving. A) how much did Natasha receive? B) how much did Amanda receive? C) who has the better amount? D) Victoria has an investment account with interest compounded quarterly. What annual interest rate does this account need to carry to earn the same annual percentage yield as Natasha's?
Camila Martinez has several credit cards, on which she is carrying a total current balance of $6,500. She is considering transferring this balance to a new card issued by a local bank. The bank advertises that, for a 4 percent fee, she can transfer her balance to a card that charges a 0 percent interest rate on transferred balances for the first 6 months. Calculate the fee that Camila would pay to transfer the balance. $ Describe the benefits and drawbacks of balance transfer cards.
Imelda opens a savings account with $12,000, which pays an annual interest rate of 7.8%. If she reinvests the generated interest every month and also deposits $2,300 each month, how much will be in the account after 2 years? The interest is reinvested on the same day as the $2,300 deposit. Otions: 69177.89 71052.15 73548.61 70524.79
Zoe Robinson has several credit cards, on which she is carrying a total current balance of $14,000. Her current cards charge her 12% per year. She is considering transferring this balance to a new card issued by a local bank. The bank advertises that, for a 3 percent fee, she can transfer her balance to a card that charges a 0 percent interest rate on transferred balances for the first 12 months. How much will Zoe save during the first twelve months if she transfers the balance?
Jeff has a credit card balance of 100,000. The annual effective interest rate on the credit card is 18%. He takes out a loan from a loan shark with an annual effective interest rate of 8% to pay off his credit card balance. How much does this strategy save Jeff if he pays off the loan in full with a single payment after 18 months?
Jassim is a Credit Officer with Riffa Bank and is working on structuring a loan facility for his client. The Bank uses Return on Net Funds Employed to price its loan: Bank policy dictates that loans must generate an 10%6 Rate of Return. Additional loan expenses on this facility will be BHD5,000. How much will Riffa Bank earn from a BHD300,000 loan for 1 year. O a. BHD 30,000 O b. BHD35,000 O C. BHD 40,000 O d. BHD 50,000
Melissa visits two competing banks. National Bank and Trust is offering a 5 year CD with an annual interest rate of 3.75%. This account will compound monthly (12 times per year). Jones Town Bank is offering a 5 year CD with an annual interest rate of 3%. This account will also compound monthly (12 times per year). The Jones Town Savings and Loan is offering a $300 bonus to all new customers. This bonus money will be deposited in Melissa’s account on the first day of her account being opened. Assuming Melissa has $10,000 to invest, which bank should she choose? If her investment amount changed to $5000, how would this affect her decision?
You owe $2,000 on a credit card that charges 20% interest. You have $2,200 in your savings account that earns 1.69% interest. Your savings account charges $14.50 a month if you keep a balance of less than $1,500 a month. Compare the amount of interest for both to decide what you should do about paying the credit card bill. Consider all factors in the decision. Show your for any calculations you may completed. In a brief paragraph, justify your decision, including a description of all factors that would affect that decision.
You owe $2,000 on a credit card that charges 20% interest. You have $2,200 in your savings account that earns 1.69% interest. Your savings account charges $14.50 a month if you keep a balance of less than $1,500 a month. Compare the amount of interest for both to decide what you should do about paying the credit card bill. Consider all factors in the decision. Show your for any calculations you may completed.
Person A deposits $2750 in an account that pays 5% interest compounded once a year. Person B deposits $2200 in an account that pays 6% interest compounded monthly. Complete parts (a) through (c) below. a. Who will have more money in their account after one year? How much more? Select the correct choice below and fill in the answer box within your choice. (Round to the nearest dollar as needed.) O A. Person A will have $ 552 more than Person B. O B. Person B will have $ more than Person A. b. Who will have more money in their account after five years? How much more? Select the correct choice below and fill in the answer box within your choice. (Round to the nearest dollar as needed.) O A. Person B will have $ more than Person A. O B. Person A will have $ more than Person B.
For the best terms on a loan or credit card, you need a credit score above 720. To achieve this, start establishing credit now. Pay all of your bills on time. In addition, use only one-third of your available credit limit and pay off your revolving balance(s) each month. R. J. Johnson has excellent credit. She wants to purchase a piece of equipment for her business and was offered 6% for 60 months for the $47,000 unit. What is her monthly payment by add-on method? Note: Round your answer to the nearest cent. Monthly payment

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS