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Can someone please explain the steps to this question thanks!

 Apr 23, 2018
 #1
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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

 

 

 

cool cool cool

 Apr 23, 2018

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