-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?
A) A
B) B
C) C
D) D

Question

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

Choice A, investing $250,000 at 4 percent, will reach $1 million the fastest due to the rule of 72, which estimates the number of years required to double an investment. The rule is calculated as 72 divided by the annual rate of return. Although the rate of return is lower for choice A compared to the others, the initial investment amount is significantly higher, leading to a faster accumulation to $1 million when considering the power of compound interest over time.

-Refer to the Above Table