a) Amount of interest after three years in both cases
Sue interest Bill interest
2300(1+.024)^3 - 2300 = 1800 ( 1 + .034)^3 - 1800 =
169.61 pounds 189.91 pounds
b) Interst earned by Bill in the 2nd situation
Interest in first two years = 1800 ( 1 + .034)^2 - 1800 = 124.48 pounds
Interest earned in the last year = ( 1800 + 124.48) (1 + .04) - ( 1800 + 124.48) = 76.98 pounds
Total interest earned = 124.48 +76.98 = 201.46 pounds
Bill definitely gets the most interest in this situation