Rishi Singh has $1,500 to invest. His investment counselor suggests that Rishi should buy an investment that pays no interest but will be worth $2,200 after 8 years.

a. What average annual rate of return will Rishi earn with thisinvestment?

b. Rishi is considering anotherinvestment, of equalrisk, that earns an annual return of2.90% . Which investment should hemake, andwhy?