Answer:
mutual fund
Step-by-step explanation:
Step one:
given data
let say the investment plan will span for 5 years
so for mutual fund
P= $1000
r= 7.5%= 0.075
t= 5
compound interest
A= P(1+r)^t
substituting
[tex]A= 1000(1+0.075)^5\\\\A=1000(1.075)^5\\\\A=1000*1.436\\\\A=$1436\\\\[/tex]
$1436
so for bond
P= $1000
r= 7.5%= 0.075
t= 5
simple interest
A= P(1+rt)
substituting
[tex]A= 1000(1+0.075*5)\\\\A=1000(1+0.375)\\\\A=1000(1.375)\\\\A=1375\\\\[/tex]
A=$1375
$1375
I would go for mutual fund compounded interest because it offers extra
$61 (1436-1375) for the same investment capital
