Hi! this is Gregory and I need some help with my Math assignment. I really need help on this assignment especially #3 of this assignment. I have try to get it started, but I need to know if I am on the right track. Please help me, Thanks.





Envision that you have served as business manager of Media World for over 2 years. You have noticed that for the last 12 months the business has regularly had cash assets of $20,000 or more at the end of each month. You have found a 6-month certificate of deposit that pays 6% compounded monthly. To obtain this rate of interest, you must invest a minimum of $2,000. You have also found a high interest savings account that pays 3% compounded daily. Based on the cash position of the business at this time, assume that you decide to invest $4,000.

1. Assume that you will invest the full amount in a certificate of deposit.

a. What would be the future value of the CD at the end of the investment term?


1a) A= FV + P (1+i) n
$ 4,000 x (1 + 1)6= $ 4,000 x 64
FV= $ 256,000




b. How much interest would the investment earn for the period?

b) I= PRT
= $4,000 x .06 x 6/12= $120



c. What would be the effective rate of the investment?

c) A= P (1+i) n
P= $4,000
$ 4,000(1 + .06/4)4
= 1.061363551 -1
Reff = .061363551
Reff = 6.14%




2. Assume that you decide to invest the $4,000 in the high-interest savings account.

a. What future value would you expect to receive at the end of 6 months?


2a) A= FV + P (1 + i) n
$4,000 + (1 +1)3 = $4,000 x 8
FV = $32,000






b. How much interest would the investment earn for the period?


b) I = PRT
I = $ 4,000 x .03 x 6/12 = $60






c. What would be the effective rate of the investment?

c) A = P (1 + i) n
$4,000(1 + .03/4)4
= 1.030339191 -1
Reff = .030339191
Reff = 3.03%




3. Write a recommendation to the partners justifying a short-term investment of business funds at this time, recommending one of these investments. Include your analysis from questions 1 and 2 in your recommendation.