Answer to Question #80347 in Economics of Enterprise for Peter

Question #80347

You have $10,000dollars and want to invest them in the best possible option.
• Bank A offers to pay 4.1% compounded quarterly
• Bank B offers to pay 4% interest, compounded monthly
• Bank C offers to pay 4.1% compounded semesterly
Additionally, petrol/ transport costs to deposit and to collect the money are:
• Bank A is online (assume free)
• Bank B is $15 per trip
• Bank C $12 per trip.
If you are planning to leave the money in the bank for three years, what option is the best ?

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