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With $10,000 available, you have two investment options. The first

With $10,000 available, you have two investment options. The first

With $10,000 available, you have two investment options. The first is to buy a certificate of deposit from a bank at an interest rate of 9% annually for five years. The second choice is to purchase a bond for $10,000 and invest the bond's interest in the bank at an interest rate of 5%. The bond pays 6.5% interest annually and will mature to its face value of $10,000 in five years. Which option is better? Assume that your MARR is 5% per year.

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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