Bob and Sue are twins. Bob invests $10,000 at 8% at age 25. Sue invests $10,000...
Bob and Sue are twins. Bob invests $10,000 at 8% at age 25. Sue invests $10,000 at 8% at age 30. Both of their investments compound annually, neither Bob nor Sue withdraw any of their principal or interest before retirement, and both of them retire at age 70. Which of the following statements is correct?
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Sue will earn more compound interest than Bob. |
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Bob will have less money when he retires than Sue. |
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Sue will earn more interest on interest than Bob. |
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If both Bob and Sue wait to age 75 to retire they will have equal amounts of savings. |
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Bob will have more money than Sue at any age. |
Homework Answers
Ans : Option (e) Bob will have more money than Sue at any age.
Since Bob investment starts increasing from 25 and as Sue invested 5 years later , Bob will have more money any time . Amount invested and interest rates are same thats y , Bob will have more money any time. The statement changes if investment and interest vary in different senario
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