You are considering different investment strategies to save for your retirement. Option 1: You invest $25/month at a rate of 3.25% APR compounded monthly for 30 years.
Option 2: You invest $75/ quarter at a rate of 4.00% APR compounded monthly for 30 years.
Option 3: You invest $1,000 at a rate of 6.25% APR compounded monthly for 30 years.
Complete the table below and answer the questions below it.
Option #
Contributions
Total Interest Earned
Final Balance
1) Which option was the least amount invested and what was the investment plan?
2) Which option yielded the highest amount at the end of the 30 years and what was the
basis of the plan?
3) What is the difference in the principal invested for the highest and lowest final
balances? What is the difference in the interest earned?
4) Is it better to invest more money in the beginning or the end of the 30 years?