Which of the Following Investments Would Have the Highest Future

question 5

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 every year for the next 10 years (a total of 10 payments).
• B) Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments).
• C) Investment C pays $125 at the beginning of every 6-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).

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Definitions:

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Noah Webster

An American lexicographer known for creating the first American dictionary, significantly influencing American English spelling standards.

Exemption

The process of freeing someone or something from a requirement that others must follow, often used in legal, tax, or military contexts.

Workingmen's Parties

Early political organizations in the United States, formed in the 1820s and 1830s, that aimed to advocate for the rights and interests of laborers and workers.