5
QuizMultiple Choice

Other Bank Accounts

Question 5 • Financial Math - MA2007

Lloyd has $20,000 to deposit. His wife’s illness leads to medical expenses beyond what their insurance will cover, so Lloyd must often quickly access his savings. Recommend a good way for Lloyd to store his money.

Answer
A
A two-year CD giving 9.1% interest annually
B
An online savings account giving 3.6% interest
C
A series of six-month money market accounts paying 4.6% interest
D
A checking account with free checks

Explanation

Lloyd needs to access his savings quickly to pay unexpected medical expenses, so liquidity matters more than earning the highest interest rate. An online savings account typically lets him withdraw money more easily than a two-year CD, which may impose a penalty for early withdrawal. The online savings account earning 3.6% is the best fit for his need.

AI-written and checked against the verified answer.

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