Question

When a child is born,

her grandfather decides to $300 in an account that earns inter
plans to make no other deposits of withdrawals for 18 years. When the child turns 18
the money in the account will be a birthday gift. The grandfather is choosing between
options:
• Option 1: An account that grows by 7.5% each year.
Option 2: An account thật grows by $35 each year.
Which option will result in a better 18th birthday gift? Explain your reasoning.

Answer 1

Option 2 7.5 of 300 is around $22 so option two gives her more money

Answer 2

option 2 because in option one 7.5% of $300 is $22.50 so more would be put in if he chose the second option