Question

A. Bank A offers a CD rate of 7% for 5 years.
B. Bank B offers a CD rate of 5% for 5 years.
C. Bank C offers a CD rate of 6% for 5 years with a $10 gas card as a perk.
Under which bank would you earn more interest on your money?

Answer 1

Answer:

A) Bank A offers a CD rate of 7% for 5 years.

Explanation:

Bank A offers the highest interest rate, 7% for five years.

Bank B offers the lowest interest rate, so that option should be eliminated.

Bank C offers a 6% interest rate for 5 years plus a $10 gas card. The gas card is just a perk with a very low value. For example, if you deposit $200 in bank A you will earn $10.20 more than if you deposited the money in bank C, and $200 is a very small amount of money for a business.