a) Explain personal financial decisions that you have made that involve compound interest? Provide relevant examples to
Question:
a) Explain personal financial decisions that you have made that involve compound interest? Provide relevant examples to support your answer.
b) Patrick is considering two different savings plans. The first plan would have his deposit RM500 every six months, and he would receive interest at a 7% annual rate, compounded semi-annually. Under the second plan, he would deposit RM1,000 every year with a rate of interest of 7.5%, compounded annually. The initial deposit with Plan 1 would be made six months from now and, with Plan 2, one year from now. What are the future value of the first plan and second plan at the end of 15 years? Which plan should Patrick use, assuming that his only concern is with the value of his savings at the end of 15 years?
Expert Answer:
a The compounding is useful for taking many personal financial decisions This can be illustrated thr... View the full answer
