Charlie has $12,000 to invest for a period of 5 years. The following three alternatives are available to him: • Account 1 pays 3.00% for year 1, 6.00% for year 2, 9.00% for year 3, 12.00% for year 4, and 15.00% for year 5, all with annual compounding. • Account 2 pays 15.00% for year 1, 12.00% for year 2, 9.00% for year 3, 6.00% for year 4, and 3.00% for year 5, all with annual compounding. • Account 3 pays interest at the rate of 8.91736% per year for all 5 years.
Based on the available balance at the end of year 5, which alternative is Charlie’s best choice? Alternative 1 Alternative 2 Alternative 3 No alternative is better than the others
Year 5 Balance, Alternative 1: $
Year 5 Balance, Alternative 2: $
Year 5 Balance, Alternative 3: $