Envision that you have served as trade manager of Media puting for everyplace 2 years. You have noticed that for the last 12 months the business organisation has regularly had cash assets of $20,000 or more at the lift of each month. You have found a 6-month credentials of postulate that pays 6% increase monthly. To obtain this pasture of engagement, you mustiness redact a minimum of $2,000. You have in like manner found a high following savings cover that pays 3% compounded daily. Based on the cash position of the business at this time, assume that you decide to drop $4,000. 1.Assume that you get out invest the full amount in a surety of deposit. a. What would be the coming(prenominal) value of the CD at the end of the enthronisation funds term? $4000 X 1.005^6 = $4121.51 b. How much interest would the investing funds lay down for the period? $4121.51 4000 = $121.51 c. What would be the effectual enumerate of the enthroni sation? 1.005^12-1=.0617 or 6.17% 2.Assume that you decide to invest the $4,000 in the high-interest savings cast. a. What future value would you expect to receive at the end of 6 months? $4000 X 1.0000833^180 = $4060.43 b. How much interest would the investment earn for the period? $4060.43 $4000 = $60.
43 c. What would be the effective rate of the investment? 1.00008333^360-1 = .0304 or 3.04 3.Write a recommendation to the partners justifying a short-term investment of business funds at this time, recommending superstar of these investments. Include your digest from questions 1 and 2 in you r recommendation. A CD account has the lim! itation of withdrawing money for six months, besides savings accounts do not have the same limit. retentivity in gather in the financial benefit of CD account which is on the high side and has a better effective rate is also better than having a savings account, therefore my recommendation is that the CD account is preferred.
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