At the End of 10 Years, Which of the Following

question 162

Multiple Choice

At the end of 10 years, which of the following investments would have the highest future value? 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).
• E) Investment E pays $250 at the end of every year for the next 10 years (a total of 10 payments).

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Definitions:

Radioisotopes

Atoms that have excess nuclear energy, making them unstable and radioactive.

Protons

Subatomic particles found in the nucleus of an atom, with a positive electric charge.

Neutrons

Subatomic particles present in the nucleus of an atom, having no electric charge.