Two investment plans offer different annual returns. Plan A offers a 5% return on a principal of $1000, while Plan B offers a 3% return on a principal of $1200. After one year, which plan yields a higher return, and by how much?

Thu, 16 Apr 2026 11:00:07 +0000

**Two investment plans offer different annual returns. Plan A offers a 5% return on a principal of $1000, while Plan B offers a 3% return on a principal of $1200. After one year, which plan yields a higher return, and by how much?** In a year marked by shifting economic conditions and rising interest, savvy investors are taking a close look at two contrasting investment plans—each offering distinct annual returns. With growing interest in earning stable income through financial products, understanding the real return differences between options is crucial. Plan A delivers a 5% return on $1,000, while Plan B offers a modest 3% on $1,200. This setup invites important questions about value, risk, and return—especially as consumers seek clarity in a competitive market. But which plan delivers more financial gain in one year? Although Plan B starts with a higher principal, Plan A outperforms due to its higher return percentage. After one year, Plan A generates $50 in returns, totaling $1,050, while Plan B earns $36 on $1,200 for a final total of $1,236. The difference is $94 more from Plan A—meaning Plan A brings a $94 advantage and slightly stronger performance despite the larger principal in Plan B. This outcome reflects the nuanced reality of investment returns: total principal size influences absolute gains, but return percentage drives efficiency. Plan A’s higher yield turns even a smaller base into greater incremental income over one year. In the current US financial climate, where income optimization matters, this contrast highlights how small percentage differences impact long-term wealth building.