what is the most suitable option for norm to invest his $15,000, considering his daughters upcoming college…

what is the most suitable option for norm to invest his $15,000, considering his daughters upcoming college plans and the associated interest rates? a. a four - year cd paying 4.8% interest, with a substantial penalty for early withdrawal b. an online savings account offering 2.3% interest c. a money market account paying 3.5% interest, renewable for three - month commitments d. a checking account with no monthly fees please select the best answer from the choices provided

what is the most suitable option for norm to invest his $15,000, considering his daughters upcoming college plans and the associated interest rates? a. a four - year cd paying 4.8% interest, with a substantial penalty for early withdrawal b. an online savings account offering 2.3% interest c. a money market account paying 3.5% interest, renewable for three - month commitments d. a checking account with no monthly fees please select the best answer from the choices provided

Answer

Brief Explanations:

Norm needs to consider both interest - earning potential and flexibility for his daughter's college plans. A four - year CD has the highest interest rate (4.8%) among the options, but has a substantial early withdrawal penalty. An online savings account has a lower interest rate (2.3%). A money market account has a 3.5% interest rate and three - month renewals, offering more flexibility than the CD. A checking account is mainly for daily transactions and has no significant interest - earning capacity. Since college plans may require some flexibility in accessing funds, the money market account is a good balance between interest and flexibility.

Answer:

C. A money market account paying 3.5% interest, renewable for three - month commitments