Question: Read the following context; We had been saving every month for the last years an amount that represents a total sum of $70,000, and now

Read the following context;

We had been saving every month for the last years an amount that represents a total sum of $70,000, and now we are planning to do some improvements in our business. In order to improve our operations and increase our revenues, we have some projects and investment alternatives that we are considering, having in mind the goal of expanding our business and opening a new store with an expected cost of $140,000.

Question

Calculate the following two options and indicate which of them would be more interesting. Please show your workings for each option.

  1. Putting all our savings in an account for 3 years at an annual interest rate of 9,5% compounded quarterly, and investing the total savings at that time for 4 more years at a 10% compounded monthly.

  1. Putting all our savings in an account for 4 years at an annual interest rate of 8% compounded semiannually, and investing the total savings at that time for 3 more years at a 11% compounded quarterly.

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