Scenario A: At age 27, you invest $1,500 that earns 9% each year. Scenario B: At age 40, you invest $2,500 that earns 11% per year. Under which scenario do you accumulate more money by age 60?
A) Scenario A
B) Scenario B
C) Both Scenarios have the same value by age 60.
D) Need more data to answer.

Question

Quizplus · Accepted Answer

Scenario A allows more time for the investment to grow due to the power of compounding over a longer period (33 years) compared to Scenario B (20 years), despite the lower annual interest rate.

Scenario A: at Age 27, You Invest $1,500 That Earns