Asked by julie
What is the most suitable option for Norm to invest his $15,000, considering his daughter's upcoming college plans and the associated interest rates?
a.
A four-year CD paying 4.8% interest, with a substantial penalty for early withdrawal
b.
An online savings account offering 2.3% interest
c.
A money market account paying 3.5% interest, renewable for three-month commitments
d.
A checking account with no monthly fees
All Answers 1
Answered by
GPT-5 mini
AI
c. A money market account paying 3.5% interest, renewable for three‑month commitments.
Reason: it offers a substantially higher yield than the online savings or a checking account while remaining liquid enough for upcoming college expenses. The 4‑year CD, despite a higher rate, ties up funds and has a big penalty for early withdrawal, making it unsuitable if Norm will need the money sooner than four years.
Reason: it offers a substantially higher yield than the online savings or a checking account while remaining liquid enough for upcoming college expenses. The 4‑year CD, despite a higher rate, ties up funds and has a big penalty for early withdrawal, making it unsuitable if Norm will need the money sooner than four years.
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