1. INTEREST VS. YIELD

Alejandro is a very hard working student who has been paying attention to Professor Harris lectures all this semester. Alejandro has been blessed by an unexpected windfall gift. Alejandros favorite prima won the lottery and just sent him $25,000! Alejandro currently banks with Wells Fargo but his cousin suggested he move his money into another bank to keep it safe but to maximize the interest he could earn on his money. His cousin told Alejandro it is not smart to be paying the banks all that yield. You should look for another choice.

1. Is Alejandros cousin correct in her analysis?

2. Here are a few savings account alternatives for Alejandro to consider. Which do you suggest he select and why?

Bank of America

California Bank and Trust

Citibank

HSBC Direct

Marcus by Goldman Sachs

c. How does your advice change if Alejandro wishes to earn at least $425 per year on his $25,000 deposited in the savings account?

d. Which choice will more likely result in Alejandro being able to enter a local physical branch near his home in Los Angeles to check on his money? Why?