Question 21.39

9. Your Uncle Blake wants to help you get a start in life after college by setting aside $10,000 now—but you get it only after you finish college, three years from now. Since you are taking this course (and have an interest in what happens with the money in the meantime!), he asks for your advice about three fairly safe investment opportunities:

  • Investment A pays 3.75% annual interest, compounded twice a year.
  • Investment B pays 4% annual interest, but compounded only once a year.
  • Investment C pays nothing until the end, when it pays 12%.

Which investment do you recommend to your uncle?

9.

Investment B