500
Bob is looking to invest $2000 to save money for college. He's considering the following options: a) a GIC paying an annual interest of 4.2% compounded quarterly b) A RESP paying an annual interest of 1.8% compounded annually, plus 20% up to $400 of the investment contributed by the government c) a mutual fund that has averaged 9.8% annual growth d) a stock fund that has averaged 14.7 % annual growth Which option is best, and why?
F Rizzio Eliminate c and d because both are "risky" investments that are not suited for saving for college. If you graph a and b, option a is the better investment if the savings will be invested for over 6.8 years. Otherwise, option b is the better choice if you can only invest for less than 6.8 years.