Scenario 1:
You have $2000.00 that you would like to save
and earn some interest over a three year period.
You have done your research and you have
narrowed your choices to two options.
Option 1: This option offers a 3.5% fixed yearly
interest rate and uses the formula:
(1 = Pxrxt)
Option 2: This option offers a 3.4% interest rate
compounded yearly and uses the formula:
A =P (1 + i)¹
Type your answers below:
Question 1: Which option will pay out the most
interest over a 3 year period? (1 point)
Answer: (State which option.):
Question 2: What is the difference in the amount
of interest earned? Calculate then type your
answers below. (3 points)