Question

1 yr CD Bank/Institution APY Term Min Deposit Live Oak Bank 2.85% 1 yr $2,500 MEMBER FDIC As of: Fri Feb 15 *** Synchrony Bank 2.80% 1 yr $2,000 MEMBER FDIC As of: Fri Feb 15 * Sallie Mae MEMBER FDIC 2.75% As of: Fri Feb 15 1 yr $2,500 *** 6. For a $2,500 investment, how much more interest would you earn if you chose Live Oak Bank over Sallie Mae? 7. If your goal was to earn $80 in interest on your $2,500 investment, what interest rate would you need to find? 8. If you got the interest rate that Synchrony Bank was offering for a different length of time, how long would you need to invest in order to get that $80 you have your heart set on? 9. As you can see, CDs don't return a ton of interest. What they DO offer is a guaranteed return. Suppose that you also had the opportunity to invest that $2,500 in a business venture that promised a 12.5% return in 1 year, unless the company failed to turn a profit, in which case you would get nothing at all back. Calculate the amount of interest you'd get, and discuss whether you'd prefer the risky investment over the CD.

          1 yr CD
Bank/Institution
APY
Term
Min Deposit
Live Oak Bank
2.85%
1 yr
$2,500
MEMBER FDIC
As of: Fri Feb 15
*****
Synchrony Bank
2.80%
1 yr
$2,000
MEMBER FDIC
As of: Fri Feb 15
*****
Sallie Mae
MEMBER FDIC
2.75%
As of: Fri Feb 15
1 yr
$2,500
*****
6. For a $2,500 investment, how much more interest would you earn if you chose Live Oak Bank over Sallie Mae?
7. If your goal was to earn $80 in interest on your $2,500 investment, what interest rate would you need to find?
8. If you got the interest rate that Synchrony Bank was offering for a different length of time, how long would you need to
invest in order to get that $80 you have your heart set on?
9. As you can see, CDs don't return a ton of interest. What they DO offer is a guaranteed return. Suppose that you also had
the opportunity to invest that $2,500 in a business venture that promised a 12.5% return in 1 year, unless the company
failed to turn a profit, in which case you would get nothing at all back. Calculate the amount of interest you'd get, and
discuss whether you'd prefer the risky investment over the CD.

1 yr CD
Bank/Institution
APY
Term
Min Deposit
Live Oak Bank
2.85%
1 yr
2,500
MEMBER FDIC
As of: Fri Feb 15
*****
Synchrony Bank
2.80%
1 yr2,000
MEMBER FDIC
As of: Fri Feb 15
*****
Sallie Mae
MEMBER FDIC
2.75%
As of: Fri Feb 15
1 yr
2,500
*****
6. For a2,500 investment, how much more interest would you earn if you chose Live Oak Bank over Sallie Mae?
7. If your goal was to earn 80 in interest on your2,500 investment, what interest rate would you need to find?
8. If you got the interest rate that Synchrony Bank was offering for a different length of time, how long would you need to
invest in order to get that 80 you have your heart set on?
9. As you can see, CDs don't return a ton of interest. What they DO offer is a guaranteed return. Suppose that you also had
the opportunity to invest that2,500 in a business venture that promised a 12.5% return in 1 year, unless the company
failed to turn a profit, in which case you would get nothing at all back. Calculate the amount of interest you'd get, and
discuss whether you'd prefer the risky investment over the CD.

Added by Richard C.

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