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Calculate the amount of money molly would accumulate

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Question: a) Identify which Bank should Molly choose in Investment 1 by computing the effective annual interest rate (EAR)?

b) Calculate the amount of money Molly would accumulate in Investment 1 after 15 years if she chooses Bank B?

c) How much is the annual interest rate, assuming compounding annually Molly should aim at if she chooses to invest her $120 000 in a saving account to get the $450,000 ready in just 10 years from now?

d) Calculate the monthly payment Molly needs to contribute into ANZ Investment Fund to get $330,000 after 15 years in Investment 2?

e) In investment 2, if Molly changes to contribute $1200/month to that super fund at the beginning of each month, how much money she would have in ANZ Investment fund after 15 years?

f) Molly is offered an investment that will pay $12 000 each year forever. How much should she pay for this investment if the rate of return 12% applies?

Reference no: EM132736699

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