Question

At the age of 18, Albert inherits $100,000 from his grandfather. One bank offers to invest this money at 10% for 5 years. A second bank offers a rate of 8% for 7 years. Which investment will yield the most money?

Answer 1

\[FV = PV \cdot (1+i)^t\]

Answer 2

FV = Future Value
PV = Present Value
i = interest
t = number of periods (in this case years)