Adita has two options for how to invest $1,000.

Plan A: Put the $1,000 in an account that pays $100 per year.

Plan B: Put the $1,000 in an account that pays 5 percent interest per year.

Which statement is true?

Plan A will be worth more than plan B after two years.

Plan A will be worth the same amount as plan B after one year.

Plan B will be worth more than plan A after three years.

Plan B will be worth more than plan A after four years.

Question

Dax Norris

Mathematics

17 November, 08:20

Adita has two options for how to invest $1,000.

Plan A: Put the $1,000 in an account that pays $100 per year.

Plan B: Put the $1,000 in an account that pays 5 percent interest per year.

Which statement is true?

Plan A will be worth more than plan B after two years.

Plan A will be worth the same amount as plan B after one year.

Plan B will be worth more than plan A after three years.

Plan B will be worth more than plan A after four years.

+4

Answers (1)

Know the Answer?

Gabriel Wilcox · Answer 1

First let's calculation

Plan A = 1000 dollars to be invested in an account that pays 100 dollars per year. (1000 + 100 = 1100 dollars in a year)

Plab B = 1000 dollars to be invested in an account that pays 5% interests per year (1000 *.05 = 50 = > 1000 + 50 = 1050 dollars per year)

Thus the correct answer is Plan A will be worth more than plan B after two years.