What is the annual worth of each choice

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Reference no: EM131998183

Yani has $12,000 for investment purposes. His bank has offered the following three choices:

Choice 1. A special savings certificate that will pay $190 each month for 5 years and a lump sum payment at the end of 5 years of $13,000

Choice 2. Buy a share of a racehorse for $12,000 that will be worth $26,500 in 5 years

Choice 3. Put the money in a savings account that will have an interest rate of 12% per year compounded monthly

Use an annual worth analysis to make a recommendation to Yani.

What is the annual worth of each choice?

Reference no: EM131998183

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