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- You have an investment proposition in front of you where you would invest 100 dollars in a project and after 2 years you can sell the investment.
Question 1:
You have an investment proposition in front of you where you would invest 100 dollars in a project and after 2 years you can sell the investment. You would earn 5% paid annually OR you can receive the interest quarterly. Which one should you go for? A. annually as you receive more in one go
B. makes no difference as the investment is the same
C. quarterly as you receive more
Feedback It is better to receive the interest quarterly as then you are receiving money more frequently and can reinvest that right away after quarter 1 instead of waiting the full year and then reinvest.
D. depends on future interest rate variations
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