Question

14. If I offered you one of the two accounts detailed below, which would you choose, and why? Account 1 $1,000.00 Account 2 $1,000.00 $1,050.00 Start $1,060.00 After 1 year $1,102.50 $1,120.00 After 2 years $1,180.00 After 3 years $1,157.63 $1,215.51 $1,240.00 After 4 years

Answer 1

Accounts with interests

Account 1 = $1000

Account 2 = $1000

Account 1 ,increases by $60 anually

Account 2 ,increases exponentially , not fixed

50, 52.5 ,55, 58 etc...

THEN ANSWER IS

If you need money in 4 years , ill choose Account 1

BUT

if you can wait more time, say 10 years ,ill choose Account 2

Then

Account 1

After 5 years =$ 1300

After 10 years =$ 1600

After 15 years = $ 1900

After 20 years= $ 2200

After 25 years= $ 2500

Account 2

After 5 years=$1276. 27

After 10 years=$ 1611.34

After 15 years=$ 1987.6 + $10.85 = $1998.45

After 20 years=$ 2382.95 + $33.635 = $ 2416.585

After 25 years= $2936.22 + $104.26 = $ 3040.48