#1**+1 **

First bank

Interest is

25000 (1.02)^3 - 25000 = $1530. 20

Second bank

The 25000 will be worth this much at the end of the first year :

25000 ( 1 + .043) = $26075

Then....this amount will be compounded for two more years at 0.9%....so we have

26075 ( 1 + .009)^2 = $26546. 46

So...the total amount of interest earned at the second bank is $26546.46 - $25000 = $1546.46

The money earns more interest at the second bank

CPhill
Apr 23, 2018