You Are Comparing Four Different Investments,as Described Below

question 87

Multiple Choice

You are comparing four different investments,as described below:
Investment A: Pays 12%,compounded annually
Investment B: Pays 12%,compounded quarterly
Investment C: Pays 12%,compounded semi-annually
Investment D: Pays 12%,compounded continuously
Which of the above investments would result in the highest future value?

• A) Investment A
• B) Investment B
• C) Investment C
• D) Investment D
• E) All of the investments would have the same future value since the stated interest rate is the same.

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Definitions:

Valid Inference

A logical conclusion that follows the premises stated in a way that is structurally sound and true according to the rules of logic.

Fallacy of Division

A logical fallacy that arises when one assumes that something true of a whole must also be true of its parts.

False Conclusion

A statement or resolution that does not logically follow from the given premises or evidence.

Premises

Statements or propositions that are taken as true and used as the basis for an argument leading to a conclusion.