Question

Tabitha would like to invest $1,000 she received for graduation. She is considering these options. A: 8% for 2 years B: 6% for 18 months C: 7% for 3 years D: 10% for 6 months Which option should Tabitha choose to end up with the largest balance?

Answer 1

The Answer Is Choice C

Explanation:

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Answer 2

To be able to know which option Tabitha should choose to end up with the largest balance, she needs to know the interest of each option. The formula in computing the simple interest is:

I = Prt

Where P = principal mount

r = simple interest rate

t = time in years

Choice A:

I = $1,000 x 8% x 2 = $160

Choice B:

I = $1,000 x 6% x 18/12 = $90

Choice C:

I = $1,000 x 7% x 3 = $210

Choice D:

I = $1,000 x 10% x 6/12 = $50

Therefore, the best option is Choice C and Tabitha should choose this one if she wanted to end up with the largest balance.