In this article we solve Question 2 of the compound interest quiz.

Question

Bob invests $200 today while Sue invests $2,000. However, Bob adds $200 to his investment after every year while Sue just leaves her initial $2,000 investment alone. If the money they invest grows at 10% per annum, which of the investments will have made more money after 20 years?

A. Bob’s investment
B. Sue’s investment
C. Both investments will make the same amount of money
D. There isn’t enough information to tell

Solution

Answer: B.