You have extra $5,000 to invest. You do not need the money nowbut will need it after 3 years, so you plan to cash your investmentat the end of 3 year. Usually your investments earn 7% annualinterest compounded annually and you’d like to consider it as yourminimum acceptable rate of return. You are considering severalinvestment opportunities: Option 1. Depositing your money on thehigh interest savings account that earns 0.58% interest each month.Option 2. Buying and holding a stock that grows 10% per year.Option 3. Making a personal loan of $5000 to a friend and receiving$400 per year. Select the best option and explain why.
