the interest rate is 5% per annum compounded monthly
that means you get .05/12 each month, NOT .05
I did this question for you , look back to see the solution.
Your solution and answers above make absolutely no sense.
. Richard Simons is selling his house. He has a choice of taking $125,000 today or $135,000 in 6
months. If he takes the money today, he can invest it at Valley Bank at 5% interest compounded monthly.
c. (1 point) How much would the 125,000 be worth in six months if invested?
125000*.05 = $ 6250
131250*.05 = $ 6562.50
137812.50*.05 =$ 6890.625
144703.125*.05=$ 7235.15625
151938.28125*.05=$ 7596.9140625
159535.1953125*.05=$ 151,938.33125
$151,938.33
d. (1 point) Which offer should he take? Why? How much more money does he gain in
making this choice?
He should take the deal in 6 months. He will gain $ 26938.33 more in making this choice.
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