Question

sofia has saved $10,000. she wants to be sure that she is earning interest on her money and can add to her savings. she also wants to be able to access her money if the need should arise. which type of account is most suitable for sofia’s needs? a money market account a certificate of deposit a savings bond a checking account

Explanation:

1. A money market account earns interest (higher than typical checking accounts), allows additional deposits, and provides relatively easy access to funds, matching all of Sofia's needs.
2. A certificate of deposit (CD) penalizes early withdrawals, so it does not meet her need for easy access.
3. Savings bonds have limited liquidity (cannot be easily accessed quickly without penalty) and do not allow regular additions easily.
4. A standard checking account offers easy access and deposits but earns very little to no interest, failing her goal of earning interest on her savings.

Answer:

a. a money market account