SOLUTION: Which is the best investment for three consecutive years? a. A growth of 5% followed by a growth of 10% followed by a growth of 15% b. A growth of 15% followed by a growth of 10%

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Question 382626: Which is the best investment for three consecutive years?
a. A growth of 5% followed by a growth of 10% followed by a growth of 15%
b. A growth of 15% followed by a growth of 10% followed by a growth of 5%
c. Three years of growth at 10% per year.
Please explain why
Answer by robertb(5830) About Me  (Show Source):
You can put this solution on YOUR website!
a and b give the same growth rate after 3 years: (1.05)*(1.10)*(1.15) = 1.32825, or 32.825%. c gives 1.10%5E3+=+1.331, or 33.1%. Hence c gives the best investment.