Question

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.

Answer 1

Answer:

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)

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

Step-by-step explanation:

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)