Dixon has a large sum of money ($10,000) that he wants to invest to finance his

Question

Dixon has a large sum of money ($10,000) that he wants to invest to finance his retirement.  He has three options...

1st investment offers a 5% return for the first 5 years, a 10% return for the next 5 years, and 20% return thereafter.

2nd investment offers 10% for the first 10 years, and 15% thereafter.

3rd investment offers a constant 12% rate of return.

Determine whihc of these investments is the best if he plans on retire in the following number of years:

A. 15 years

B. 20 years

C. 30 years

(show work)

Explanation / Answer

B. 20 years

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