An investor has the opportunity to invest at 15 per cent per year. Would they prefer to have $20,000 in a year's time or have any of the following sums now?

Question

Quizplus · Accepted Answer

To determine which choice is the best, we need to calculate the future value of each option.

For option A, the future value after one year would be:

$15,000 x 1.15 = $17,250

For option B, the future value after one year would be:

$16,000 x 1.15 = $18,400

For option C, the future value after one year would be:

$15,667 x 1.15 = $18,001.05

For option D, the future value after one year would be:

$17,500 x 1.15 = $20,125

Based on these calculations, it is clear that option D is the best choice as it has the highest future value after one year, which is greater than the $20,000 that the investor could receive by waiting a year. Therefore, the investor should choose option D to maximize their returns.

An Investor Has the Opportunity to Invest at 15 Per