Tony plans to invest $23,000 for 360 days into a GIC Tony has two options Option A Invest the money in a 360 day GIC at 5 1 simple interest Option B Invest the money in a 180 day GIC at 3 8 simple interest and then re invest the maturity value from the first 180 day GIC into another 180 day GIC If ...

Option A Maturity Value Principal x 1 Interest Rate x Time Maturity Value 23000 x 1 0051 x 360365 Ma ...

Tony plans to invest $23,000 for 360 days into a GIC. Tony has two options: Option A:

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Tony plans to invest $23,000 for 360 days into a GIC. Tony has two options:

Option A: Invest the money in a 360-day GIC at 5.1% simple interest.
Option B: Invest the money in a 180-day GIC at 3.8% simple interest and then re-invest the maturity value from the first 180-day GIC into another 180-day GIC.

If Tony chooses Option A, what is the maturity value at the end of the 360-day GIC?

Suppose Tony selects Option B.

What interest rate does the second 180-day GIC need so that Tony receives the same maturity value as the 360-day GIC?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Mar 20, 2023 12:53 AM

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Tony plans to invest $23,000 for 360 days into a GIC. Tony has two options: Option A:

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Option A Maturity Value Principal x 1 Interest Rate x Time Maturity Value 23000 x 1 0051 x 360365 Ma... View the full answer

Income Tax Fundamentals 2013

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