Question

Suppose a magic genie offers you two options. Option 1: The genie will give you $1000...

Suppose a magic genie offers you two options.

Option 1: The genie will give you $1000 on the first day of the year and will add $1000 to what you have each succeeding day of January until the end of the month.

Option 2: The genie will give you 2 cents on the first day of the year and will double the amount you had on the previous day for each day of January until the end of the month.

You can use Excel to help you solve this of you may do it by hand. As a hint, I have started your chart:

Date in January Total $ with Option 1 Total $ with Option 2
1 1000 0.02
2 2000 0.04
3 3000 0.08
4

For option 2, on January 31, you have ________ times as much money as you had on January 1.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Two different companies provide maintenance services and their pricing offers are as follows: For both options,...
Two different companies provide maintenance services and their pricing offers are as follows: For both options, the initial payment is at the beginning of the contract, and the monthly payments are at the end of each month. Company 1) An eight-year contract with an initial payment of $12,000, and $2,000/month for the first three years, a payment of $3000 at the end of year 3, and $2,500/month in years 4 to 8. Company 2) A six-year contract, with an initial...
. . You have a debt with two payment options. Option 1 is to pay $3000...
. . You have a debt with two payment options. Option 1 is to pay $3000 in one year from today, $5,000 in two years from today, and $8,000 in three years from today. Option 2 is to pay $15,000 today. Demonstrate which is the better option for you if money is worth 5.00 % p.a. simple interest. Don’t forget to state which is the better option for you ( 10 points) show your caculation by BAII plus caculator.You are...
1) Congratulations, you just bought a new jacuzzi!   You have two payment options. Option 1 is...
1) Congratulations, you just bought a new jacuzzi!   You have two payment options. Option 1 is to pay $3000 in one year from today, $5,000 in two years from today, and $8,000 in three years from today. Option 2 is to pay $15,000 today. Demonstrate which is the better option for you if money is worth 5.00 % p.a. simple interest. Don’t forget to state which is the better option for you *Please use financial calculator method and show the...
1.   You have just received some great news from your parents… they are going to give...
1.   You have just received some great news from your parents… they are going to give your inheritance early, starting now! But, they’re going to force to you make a decision on how you want it. At the end of the day, they are going to give you a total of $500,000. But you have to pick one of the two options for disbursement: Option A: You get it in three lump sum payments as follows: •   You receive $100,000...
You need to take a loan of $1,500. You have two repayment options: - Option 1...
You need to take a loan of $1,500. You have two repayment options: - Option 1 : Short-term 6% interest loan with a term of 1 year - Option 2 : 1-year simple interest amortized loan at 6% interest, monthly payments Calculate the total interest paid for both plans. Explain why you pay more interest with one of the options, and which option you would prefer.
1. In the money, out of the money. Suppose you purchased a two-month put option on...
1. In the money, out of the money. Suppose you purchased a two-month put option on 1,000 shares of a company’s stock with a strike price of $65/share. a. The current market value of the stock is $70/share. What is the intrinsic value of your option? b. In the first month, the maximum price of stock was $72/share and the minimum price of the stock was $68/share. For the first month, were you in the money, out of the money,...
You have two investment options: Option A You can purchase $2,000 of stock in a company....
You have two investment options: Option A You can purchase $2,000 of stock in a company. You estimate that this company will earn a total of $10,000 during its life. You expect the company to pay all of these earnings to you as a dividend 10 years from today. Currently, the risk-free rate is 1% but this investment is really risky and you feel that a 14% discount rate is appropriate. Option B You can purchase $2,000 worth of bonds....
1. Assuming you are 30yrs and ready to retire at age 60yrs, you invest $1000 at...
1. Assuming you are 30yrs and ready to retire at age 60yrs, you invest $1000 at the end of each month at the rate 8% (a) How much will you have at age 60yrs 2. Assuming you are 35yrs and ready to retire at age 60yrs, you invest $1000 at the end of month at the rate 8%. (a) How much will you have at age 60yrs 3. What is the percentage difference between the two assumptions?
5. Suppose you have two options on a $150,000, 30-year, fixed-rate mortgage. Option one is a...
5. Suppose you have two options on a $150,000, 30-year, fixed-rate mortgage. Option one is a 5.25% contract rate with 2.00 points. Option two is 5.00% contract rate but you have forgotten how many discount points are charged. Both loans have a 3% prepayment penalty for the first eight years of life. A. (1 pt) Calculate the number of points on option two that would equalize the APRs of the two loans. Answer: ________ B. (1 pt) Calculate the number...
You need to take a loan of $1,500. You have two repayment options: - Option 1:...
You need to take a loan of $1,500. You have two repayment options: - Option 1: Short-term 6% interest loan with a term of 1 year - Option 2: 1-year simple interest amortized loan at 6% interest, monthly payments Calculate the lump sum payment for plan A. Then calculate the monthly payment for plan B. Explain how you arrived at your answer.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT