Peter just got his drivers license, and he wants to buy a new sports car for $70,000.
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Peter just got his driver’s license, and he wants to buy a new sports car for $70,000. He has $3,000 to invest as a lump sum today. Peter is a conservative investor and he only invests in safe products. After approaching different banks, he is offered the following investment opportunities:
(1) River Bank’s savings account with an interest rate of 10.8% compounded monthly.
(2) First State Bank’s savings account with an interest rate of 11.5% compounded annually.
(3) Union Bank’s saving account with an interest rate of 9.3% compounded weekly. How long will it take for Peter to accumulate enough money to buy the car in each of the above three cases?
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Step by Step Answer:
To determine how long it will take for Peter to accumulate enough money to buy the sports car in each of the three cases we can use the formula for co...View the full answer
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Related Book For 
Principles Of Managerial Finance
ISBN: 9781292018201
14th Global Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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