Elizabeth has a choice between two equivalent investments. Option A: Invest $1,000 and receive $100 at...
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Elizabeth has a choice between two equivalent investments. Option A: Invest $1,000 and receive $100 at the end of every two years forever. Option B: Invest $1,000 and receive $170 at the end of every three years forever. Define i as the effective annual interest rate for investment A and ig as the effective annual interest rate for investment B. Calculate IAIB. 1. 0.57 2. 0.65 3. 0.88 4. 0.91 5. 0.99 Elizabeth has a choice between two equivalent investments. Option A: Invest $1,000 and receive $100 at the end of every two years forever. Option B: Invest $1,000 and receive $170 at the end of every three years forever. Define i as the effective annual interest rate for investment A and ig as the effective annual interest rate for investment B. Calculate IAIB. 1. 0.57 2. 0.65 3. 0.88 4. 0.91 5. 0.99
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