Investing question

Question

John has a $1000 to invest. He has one year when he will need whatever capital he earns for an investment on a home.

He can choose one of two options.
Option A. Daily return of 3.33% with it maturing at the end of two months.
However, his daily returns can be reinvested right away if he so chooses with the minimum requirement having to be $10.
Option B. A monthly return of 200% with it maturing every month. He can not reinvest the the earning until the end of its maturation (only monthly).

Which option is better. Explain/show your reasoning.

Answer 1

Future Value of $1,000 invested at 3.33% with daily compounding for 60 days results in $7,138.15 at the end of two months.

 

FV = 1000*(1.333)^60 = 7,138.15

 

Future value of $1,000 invested for 1 month at 200% yields 3,000 which invested for another month grows to $9,000

 

1000(300%)^2