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ACT
ACT Math Section

Comparing Investment Returns

Very Hard Integrating Essential Skills Arithmetic

Jordan is comparing two investments for his savings. The first investment is a savings account that offers an annual interest rate of 3% compounded annually. The second investment is a bond that pays a flat amount of $200 after 5 years with no additional interest.

Jordan plans to invest $5,000 in each option. To determine which investment yields a higher return, calculate the total amount from the savings account after 5 years and the total amount from the bond. Then find the difference between the two total amounts.

Express your answer to the nearest cent.

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