Question

13. Shelby is trying to decide which financial institution she should use to save her money. She

has received the following four offers. Which would you suggest she choose?
OA Simple interest account at 5.5% interest
OB Compound interest account calculated monthly at 5%
OC Compound interest account at 5% interest
OD Simple interest account at 5% interest

Answer 1

To suggest the financial institution Shelby should choose, we compare the interest rates and compounding frequencies of the offers.

Step-by-step explanation:

In order to suggest which financial institution Shelby should choose, we need to compare the different interest rates and compounding frequencies of the offers.

OA: Simple interest account at 5.5% interest
OB: Compound interest account calculated monthly at 5% interest
OC: Compound interest account at 5% interest
OD: Simple interest account at 5% interest

Since compound interest accounts typically offer higher returns, we should choose the account with the highest interest rate and frequency of compounding. In this case, Shelby should choose OB: Compound interest account calculated monthly at 5% interest. This will yield the highest returns on her savings.

Learn more about Comparing interest rates and compounding frequencies of financial institutions