Unformatted text preview: compounding). (3) A payment scheme of 8 quarterly payments made over the next two years. The first payment of $800 is to be made at the end of the current quarter. Payments will increase by 20% each quarter. The money is to be deposited in an account paying a 12% nominal annual rate, but compounded quarterly (to be left on deposit for the entire 2year period). Which one would you choose? A) Choice 1 B) Choice 2 C) Choice 3 D) Neither one, since they all have negative present values. E) Either one, since they all have the same present value. Points Earned: 2.5/5.0 Correct Answer(s): A...
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 Spring '09
 SHMIDL
 Finance, Remainder, Interest, Options, nominal annual rate

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