Question
You can buy a $50savings bond today for $25 and redeem the bond in 10 years for its full facevalue of $50. You could also
You can buy a $50savings bond today for $25 and redeem the bond in 10 years for its full facevalue of $50. You could also put your money in a money market account that pays7% interest per year. Which option is better assuming they are of equal risk?
a. The money market accounnt is better because it pays more interest.
b.. The money market account is better because it requires a smaller investment.
c. The savings bond is better because it earns a higher interest rate.
d. The money marketand savings bond both earn 7% interest, so they are equal in value.
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