Question

Patrick has $12,000 saved for medical school from gifts and summer jobs. Because the cost of college has risen each year, Patrick knows he needs a savings account that will help him meet these increases. In the 10 remaining years before he receives his medical degree, which of the following would most help Patrick to meet these increases?
A. A checking account
B. A compound interest account
C. A high risk investment
D. A simple interest account

Answer 1

Based on the given situation above about Patrick's savings, I can say that the best option for him in order to keep up with the increase 20 years after would be to utilize a compound interest account. The answer would be option B. Notice that with compound interest account, the amount he gets is around $31,000. Hope this helps.