a client comes to you for an investment advice on his $500,000 winnings from the lottery. which of these options would be the best for his investment 6% compounded interest quarterly for 5 years or 8% compounded interest annually for 5 years or 14.5% simple interest for 10 years.

Question

a client comes to you for an investment advice on  his $500,000 winnings from the lottery. which of these options  would be the best for his investment  6% compounded interest quarterly for 5 years or 8% compounded interest annually for 5 years or 14.5% simple interest for 10 years.

tkhunny · Answer

You probably should talk about taxes, first.

Anyway...Can you do NONE of it?  Calculate the interest earned under each scenario.

Note: Part of the question makes no sense at all.  Are the two five year periods intended to be consecutive or sequential?  If they are not back-to-back, then it is very difficult to compare a 5 year investment with a 10 year investment.  What happens in one case with the missing five years?!