Marta is twenty eight years old, and she has no dependents. She has saved an emergency fund and an extra $1,500.
She would like to save or invest this money in hopes that it will grow fast. Marta does not mind taking risks with her
money. Which type of account or investment is best for her?
fifteen-year savings bond
IDA
mutual fund
basic savings account earning 1.3 percent Interest, compounded monthly

Mutual fund is a type of investment where professionals managed a pooled sum money contributed by different investors. These funds are invested into buying stocks , bonds other securities towards profit making.

It has its advantages in professional management , shared risks, dividends reinvestment and convenience. However , the disadvantages include poor trade execution ,potential for management bias and high fees.

izzyivantierney izzyivantierney · Answer 2 · 2022-05-16T03:19:41+02:00

Answer:

The correct answer would be a basic savings account earning 1.3% interest, compounded monthly.

Explanation:

Taking into account that Marta does not like taking risks with her money and does not have an emergency fund she should not invest in stocks. She also wishes to use her money within 18 months, so a fifteen-year savings bond would not be a great choice.

A mutual fund is a collection of money from a group of investors to buy different investments. This choice will also not work well for Marta.

An IDA is an individual development account for low-income families to save towards a targeted amount usually used for building assets in the form of home ownership, post-secondary education and small business ownership. Not a great account for a single person with no dependants.

$1,500 at 1.3% interest, compounded monthly after 18 months equals about $1,520. Even though Marta won't be earning a huge amount of money, she will still earn some. Since she doesn't have an emergency fund and doesn't like risks, a basic savings account earning 1.3% interest, compounded monthly will be the right choice for her.