Given a choice of two investments, would you choose one that pays a total return of...

 

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Given a choice of two investments, would you choose one that pays a total return of 20 percent over 5 years or one that pays 0.4 percent per month for 5 years? What annual rate of return does each give you? Instructions: Enter your responses in percentages to the nearest hundredth (2 decimal places). For example, 3.00 for 3 percent. The return of 20 percent over 5 years provides an annual return of .04 percent. The return of 0.4 percent per month for 5 years provides an annual return of [ 4.8 percent. The investment that pays 0.4 percent per month over 5 years is preferable. Given a choice of two investments, would you choose one that pays a total return of 20 percent over 5 years or one that pays 0.4 percent per month for 5 years? What annual rate of return does each give you? Instructions: Enter your responses in percentages to the nearest hundredth (2 decimal places). For example, 3.00 for 3 percent. The return of 20 percent over 5 years provides an annual return of .04 percent. The return of 0.4 percent per month for 5 years provides an annual return of [ 4.8 percent. The investment that pays 0.4 percent per month over 5 years is preferable.

Answer rating: 100% (QA)

Heres a breakdown of the returns for each investment Investment 1 20 total return over 5 years Annu... View the full answer