ECO 110 UNIT 1 Milestone 1 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED A+

11 questions were answered correctly. 1 question was answered incorrectly. 1 Preethi plans to buy a house within the next 5 years. At present, she has total savings of $60,000. The median house price in her state is nearly $100,000. Which of the following investment options will Preethi most likely benefit from?  Investing $60,000 for 2 years at an interest rate of 13%  Investing $60,000 for 4 years at an interest rate of 12%  Investing $60,000 for 3 years at an interest rate of 10%  Investing $60,000 for 5 years at an interest rate of 10% RATIONALE Preethi should invest $60,000 at 10% interest for a period of 5 years. To calculate the most beneficial investment from these options, we will use the formula to calculate the future value of the invested money at different interest rates and different periods. Suppose we take the values as follows: PV = $60,000 N = 5 I = 10% By substituting the numbers in the equation, we get Therefore, this investment is the most beneficial for Preethi. CONCEPT