Suppose that you have access to an investment account that pays 8% annual interest, compounded annually. You are considering the following investment strategies, and you wish to choose the one that will have the highest future value seven years from today (at the end of Year 7). Which should you choose? A. $9,000 deposited at the end of each of the next seven years (Years 1 through 7) B. $20,000 deposited at the end of the second, third, and fourth years (Years 2 through 4) C. A lump sum of $60,500 deposited three years from today (the end of Year 3)

Q&A Education