Which of the Following Investments Would Have the Highest Future

question 89

Multiple Choice

Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual rate for all investments is the same and is greater than zero.

• A) Investment A pays $250 at the beginning of eyear for the next 10 years (a total of 10 payments).
• B) Investment B pays $125 at the end of e6-month period for the next 10 years (a total of 20 payments).
• C) Investment C pays $125 at the beginning of e6-month period for the next 10 years (a total of 20 payments).
• D) Investment D pays $2,500 at the end of 10 years (just one payment).
• E) Investment E pays $250 at the end of eyear for the next 10 years (a total of 10 payments).

---

Definitions:

Implied Warranties

Legal assurances that are not explicitly stated but are assumed in the sale of goods, suggesting they will function as expected.

Transaction

A business deal or action, such as buying or selling, between two or more parties.

Warranty

A warranty is a guarantee provided by a seller to a buyer, promising to repair or replace a product if it fails within a certain period after purchase.

Disclaimed

The act of renouncing a claim to or denying responsibility for something, often seen in legal disclaimers or warranties.