Exercise 3: Why "3.6% With a Chance of Extra" Misreads Premium Bonds — Possible Solution
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This reasoning treats the 3.6% figure as though it were a guaranteed
personal return with a bonus chance on top, but the chapter's own real
explanation says the opposite - 3.6% describes the total prize fund
rate, not a guaranteed individual return, and an ordinary savings
account's published rate genuinely is a guaranteed personal return,
which is a real, fundamental difference, not a minor detail.

The chapter's own real odds make the actual risk concrete: any single
£1 bond has roughly a 22,000 to 1 chance of winning a prize in a given
month. At only £1,000 held, this person has a comparatively small
number of bonds in the draw, and the chapter explicitly notes that
smaller holders often win nothing at all in a given year - meaning a
genuinely realistic outcome for this £1,000 is receiving £0 in return
for an entire year, something that could never happen with an
ordinary guaranteed-interest savings account paying a real published
rate.

For an emergency fund specifically, this matters even more: the whole
point of the fund is reliable value when it's actually needed, and a
genuinely possible £0 annual return works directly against that goal,
regardless of the small chance of winning something larger.

ANSWER: This reasoning is wrong because 3.6% is the total prize pool
rate, not a guaranteed personal return the way a savings account's
published rate is - at only £1,000 held, with roughly 22,000-to-1 odds
per £1 bond, a real, entirely possible outcome is winning nothing at
all for the year, which an ordinary savings account could never do.
For an emergency fund specifically, that unpredictability works
against the fund's whole purpose of being reliably there when needed.

WHY THIS WORKS AS AN ANSWER
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This correctly applies the chapter's own real odds and small-holder
caveat to explain why the headline 3.6% figure is being misread as a
guaranteed return, and ties the conclusion back to what actually
matters for an emergency fund specifically.