Reference no: EM131968749

A) Mike is considering putting his money in one of two investments. Investment 1 pays 4.6 percent simple interest. Investment 2 compounds interest annually. At what annual compound rate should Investment 2 offer for Mike to be indifferent between the two investments? Assume a fifteen (15) year investment horizon.

A number equal to or greater than 2.25 but less than 2.55

A number equal to or greater than 2.55 but less than 2.85

A number equal to or greater than 2.85 but less than 3.15

A number equal to or greater than 3.15 but less than 3.40

A number less than 2.25 or an amount greater than 3.40

B) Three years ago, Jameson invested $14,800. In 4 years from today, he expects to have $25,300. If Jameson expects to earn the same annual return after 4 years from today as the annual rate implied from the past and expected values given in the problem, then in how many years from today does he expect to have exactly $40,000?

A. A number equal to or greater than 4.50 but less than 5.50

B. A number equal to or greater than 5.50 but less than 6.50

C. A number equal to or greater than 6.50 but less than 7.50

D. A number equal to or greater than 7.50 but less than 8.50

E. A number less than 4.50 or an amount equal to or greater than 8.50