Rob wants to invest $15,000 for 7 years.Which one of the following rates will provide him with the largest future value?
A)3 percent simple interest
B)3 percent interest, compounded annually
C)2 percent interest, compounded annually
D)4 percent simple interest
E)4 percent interest, compounded annually

Question

Quizplus · Accepted Answer

Compounding interest annually at a higher rate (4%) will yield the largest future value compared to simple interest or lower compounding rates.

Rob Wants to Invest $15,000 for 7 Years