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  3. 1.) what investment accumulates more interest--15%

1.) What investment accumulates more interest--15% compounded semiannually, or 14% compounded daily? ...

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Accounting

1.)

What investment accumulates more interest--15% compounded semiannually, or 14% compounded daily?

a.

The 15% option earns one percentage point more than the 14% option over a year
b.

The 15% option accumulates more over a year--EAR of 15.5% vs. the 14% option, with an EAR of 15.0%
c.

They accumulate the same amount over a year
d.

The 14% option earns an EAR of 15% and is better than the 15% option with an EAR of 15.9

2.)

Four mortgages:
W X Y Z
Borrow 1,000 1,000 1,000 1,000
Balloon payment 0 200 1,000 1,300
Which of the following is most correct?
a.

Y is full amortization; X is negative amortization
b.

W is zero amortization; Y is full amortization
c.

X is partial amortization; Z is negative amortization
d.

W is full amortization, X, Y and Z are all partial amortization

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