Determine the difference between the two investments

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Reference no: EM132821254

Problem 1: An investor is considering depositing $10,000 and making $400 semi-annual contributions for the next five years. If one investment provides 5% compounded monthly and another investment provides 5.2% compounded semi-annually, determine the difference between the two investments.

a. The investment earning 5% will have a future value of $17,320.33, while the investment earning 5.2% will have a future value of $17,428.25, for a difference of $107.92.

b. The investment earning 5.2% will have a future value of $17,320.33, while the investment earning 5.0% will have a future value of $17,428.25, for a difference of $107.92.

c. The investment earning 5.2% will have a future value of $17,230.33, while the investment earning 5.0% will have a future value of $17,248.25, for a difference of $107.92.

d. The investment earning 5% will have a future value of $17,428.25, while the investment earning 5.2% will have a future value of $17,320.33, for a difference of $107.92.

Reference no: EM132821254

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