At the end of each year, for the past 25 years Sara has deposited $6,000 in her savings account. A risk-averse investor, during that period her conservative investment choices averaged a 4.8% annual return, compounded semi-annually. Heather made the same sized deposits in her own account, but she was more of a risk-seeker. Over the same 25 year period, due to her more aggressive investment choices Heather averaged an investment return of 7.3%, compounded monthly. How did Sara's account fare compared to Heather's, in terms of future value? Did Sara make poor choices?

Answer rating: 100% (QA)

23 24 25 26 27 28 29 30 31 32 33 34 35 B 14 15 16 17 18 Semiannual rate 19 20 21 22 36 37 38 39 ... View the full answer