Eleven years ago, Chad invested $9,000. Six years ago, Allison invested $12,000.

Question

Eleven years ago, Chad invested $9,000. Six years ago, Allison invested $12,000. Today, both Chad's and Allison's investments are each worth $2,400. Assume that both Chad and Allison continue to earn their respective rates of return. Which one of the following statements is correct concerning these investments?

Allison has earned an average annual interest rate of 3.37 percent.

Chad has earned an average annual interest rate of 6.01 percent.

Three years from today, Allison's investment will be worth more than Chad's.

One year ago, Chad's investment was worth less than Allison's investment.

Allison earns a higher rate of return than Chad.

Allison has earned an average annual interest rate of 3.37 percent.

Chad has earned an average annual interest rate of 6.01 percent.

Three years from today, Allison's investment will be worth more than Chad's.

One year ago, Chad's investment was worth less than Allison's investment.

Allison earns a higher rate of return than Chad.

Explanation / Answer

Eleven years ago, Chad invested $9,000. Six years ago, Allison invested $12,000. Today, both Chad's and Allison's investments are each worth $2,400. Assume that both Chad and Allison continue to earn their respective rates of return. The following statement is correct concerning these investments :

" Three years from today, Allison's investment will be worth more than Chad's."

=> From the Allison's more worthy investment than Chad's, as in today, both the investments worth equal and at the same rate of return Allison's is going to worth more after 3 years from now.

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