Assume that you won $300,000 and you want to spend half of the money and invest the rest (or
invest all). You need to make a decision on how to invest the money and you need to persuade
your partner (or parents) that you made the right choice.
A. List two or three financial institutions and their terms and conditions (interest rate, how
the interest is calculated, minimum balance, etc…)
B. Calculate what your savings would be in 10 years (or 20 years) in each institution that
you listed. Justify your answer (show your work).
C. What financial institution would you choose? And why?
D. Discuss the conclusion you draw from your calculations, and reflect how the mathematics
helped you make the decision.
Sample Solution