On the Internet you find the following offers for opening an online account. Which of them is the best offer if you have $2,000 to save for two years?

A) An interest rate of 5 percent, with the bank charging you a $15 processing fee at the time you open your account
B) An interest rate of 3.5 percent, with the bank giving you a $35 bonus to open your account
C) An interest rate of 4 percent, with the bank giving you a $20 bonus at the time you open your account
D) An interest rate of 4.5 percent, with no processing fee and no bonus

Question

Karen Danielle · Accepted Answer

Final Answer : A, Explanation :  Option A provides the highest return despite the initial processing fee. With a 5% interest rate on $2,000 for two years, the interest earned would be $200 ($2,000 * 5% * 2), minus the $15 fee, resulting in a net gain of $185. The other options offer lower interest rates and, even with bonuses, result in lower overall returns.

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