Question: Answer all questions show calculations/ thanks! Statement True False Everything else held constant, an account that earns compound interest will grow more quickly than an
Statement True False Everything else held constant, an account that earns compound interest will grow more quickly than an otherwise identical account that earns simple interest. After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest. All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year. Alek is willing to invest $30,000 for six years, and is an economically rational investor. He has identified three investment alternatives (A, B, and C) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the six-year investment period, complete the following table and indicate whether Alek should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is earned annually. The final value should be rounded to the nearest whole dollar. Make this investment? Investment Interest Rate and Method Expected Future Value Yes No 8% simple interest 3% compound interest 5% compound interest
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