Line A: $16\%$grad, Line B: $8\%{?}_g$rad Line C: $0\%$grad

Investments and loans base their interest calculations on one of two possible methods: the simple grad interest and the

compound grad interest methods. Both methods apply three variables$-$the amount of principal, the interest rate, and the investment or deposit

period$-$to the amount deposited or invested in order to compute the amount of interest. However, the two methods differ in their relationship

between the variables.

Assume that the variables I, N$,$ and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or

invested, respectively. Which equation best represents the calculation of a future value $($FV$)$ using:

Compound interest?

$FV=P\frac{V}{(1+I{)}^N}$

$FV=PV(1+I{)}^N$

$FV=\frac{(1+I{)}^N}{P}V$

Simple interest?

$FV=P\frac{V}{PVIN}$

$FV=PV+(PVIN)$

$FV=PV-(PVIN)$

Identiry whether the following statements about the simple and compound interest methods are true or false.

Alek is willing to invest $$30,000$ for eight 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 eight$-$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 eamed annually. The final value should be rounded to the nearest

whole dollar.