Suppose you have 100,000 dollars for investment. There are three banks that have different offers to you.
Bank A offers you 4% interest compounded monthly
Bank B offers you simple interest 6%.
Bank C offers you 5% interest compounded yearly.
(a) If you plan to save your money for one year, which bank will you choose?
(b) If you plan to save your money for 5 years, which bank will you choose?Does your opinion change? Why?
(c) If you plan to save your money for 15 years, which bank will you choose? Does your opinion change? Why?