Question

Scenario:

Answer 1

Answer:

Step 1

The equation for each step is given below.

let x be the value of investment and n time period, then

Option 1  X= 25000 (1.0525)^N

Option 2  X= 25000 (1.05875)^N

Option 3  X= 25000 (1.0562)^N (annual return = (1+5.5/4)^4-1))

Step 2

By solving each equation given in above subject we can calculate value under each option (N=6)

Option 1  X= 25000 (1.0525)^6 = 33,984

Option 2  X= 25000 (1.05875)^6 = 35,213

Option 3  X= 25000 (1.0562)^6 = 34,707

Step 3

Thes best is to go with option 2 as it will give high return.