The big idea: In IB finance questions, 'better' does not mean 'looks nicer'.
It means better for the specific goal in the question: larger final value, smaller cost, faster growth, or some other stated criterion.
| Question wording | What you should compare |
|---|---|
| Which investment is better? | Final value after the same time |
| Which loan is cheaper? | Total paid or remaining balance |
| Which account grows faster? | Value after a stated period |
| Which option should the saver choose? | Mathematics plus a final contextual decision |
Always use the criterion in the question: If the question asks which option gives the larger amount after 5 years, compare the 5-year values.
Do not switch to a different criterion.
Quick recognition example
A question asks which account is better for a student who wants the largest balance after 3 years.
What should be compared?
Step by step
- The goal is the largest balance after 3 years.
- So calculate the value of each account after 3 years and compare them.
Final answer
Compare the final balances after 3 years.
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Worked example
A saver invests $2 500 in Account A at 4.5% compounded yearly, or Account B at 4.4% compounded monthly.
Which is better after 4 years?
Step by step
- Account A:
- Account B:
- Compare the final values.
Final answer
Account B is better because it gives the larger balance after 4 years.
The comparison sentence matters: Do not stop after two calculations.
IB comparison marks usually depend on a clear final sentence such as 'Account B is better because...'.
Learn what examiners really want
See exactly what to write to score full marks. Our AI shows you model answers and the key phrases examiners look for.
The big idea: Some finance questions try to distract you by changing more than one thing at once: rate, deposit, or compounding frequency.
You must compare the values that answer the question, not just one attractive-looking feature.
| Option | What looks attractive | What you must actually compare |
|---|---|---|
| Higher rate but smaller deposit | The percentage rate | Final balance |
| Same deposit but different k | Compounding frequency | Final balance |
| Larger deposit but lower rate | Starting amount | Final balance after the same time |
Worked example — different starting amounts
Option A starts with $5 000 at 4% compounded yearly.
Option B starts with $5 400 at 3% compounded yearly.
Which is larger after 3 years?
Step by step
- Option A:
- Option B:
- Compare the two results.
Final answer
Option B is larger after 3 years, even though its rate is lower, because it started with more money.
| Weak answer | Why it loses marks | Better answer |
|---|---|---|
| B is better. | No evidence given | B is better because its final value is $2981.16 compared with $2973.88 for A. |
| A = 5624.32, B = 5900.85 | No actual conclusion | B gives the larger balance, so it is the better option for this saver. |
A finance conclusion should sound like a decision: The best final line sounds like advice based on mathematics: 'Option B should be chosen because it gives the larger balance after 3 years.'
Mini conclusion practice
Suppose Option X gives $8 420 and Option Y gives $8 611 after 5 years.
Write the final sentence.
Step by step
- State which is larger.
- Turn that into a contextual conclusion.
Final answer
Option Y is better because it gives the larger final amount after 5 years.