Read the following context;

Ms. Helen is working hard every day. She has been saving every month for 5 years an amount per month that represents a total sum of $52,500. Now she is planning her future, but she is still deciding what to do. When she started working, she didnt have a specific plan, but she has always dreamed of having a house in the valley.

Question 1

With her current savings, Ms. Helen is planning to buy the house within the next 9 years. Considering that its market price will rise up to $140,000, and the current market rates are around an annual 8%, calculate each of the following investment options and explain which is more attractive based on those calculations. Please show your workings for each option.

1. Investing all her savings in a product that offers an annual 13% simple interest for 9 years.

2. Investing part of her savings in a product that offers an annual interest of 12% compounded quarterly for 9 years to produce $140,000.

3. Investing all her current savings in a project that will produce annual cashflows of $15,600 for 9 years.

Best option: