A couple has $5,000 to invest and has to choose between three investment options.
• Option A: 2.25% interest applied each quarter
• Option B: 3% interest applied every 4 months
• Option C: 4.5% interest applied twice each year
If they plan on no deposits and no withdrawals for 5 years, which option will give them the largest
balance after 5 years? Use a mathematical model for each option to explain your choice. Share the
value of each investment.
Make sure you use the formula from the lesson for each option then compare. As an investment, you
want the option with the most money!
nt
A = P(1 +r )"nt
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