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John receives $1,000 as a graduation gift from his grandparents. Rather than spend it, he decides to invest it in a two-year bond that earns 3% simple interest. John doesn't need access to the money right away because he wants to save it for when he's ready to buy a home in about 10 years. Is the bond a wise investment for John? Why or why not?

Verified Answer :

The bond doesn’t sound like it’s a wise investment for John because he’s using a two-year bond for something he’s not going to access for 10 years. John could find a way to invest his money into a 10-year bond with any form of interest.

Hope this helps.

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