Constance will put $500 in a savings account. Which option should she choose so that she will have the most money?

Assuming the stated rates are annual and interest is compounded yearly, compare the balances after the listed time. At 7% for 2 years, $500 becomes $500 × 1.07² = $572.45. The other balances are $560 at 12% for 1 year, $545 at 9% for 1 year, and $551.25 at 5% for 2 years, so 2 years at 7 percent gives her the most money.

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