Respuesta :
Answer: He should invest in second bank to get the most interest over the three year period.
Step-by-step explanation:
Since the initial amount= $15000 and number of years=3
Here, Compound Interest rate in first saving bank = 2.5% a year
Thus, the total amount by the first bank =[tex]1500(1+\frac{2.5}{100} )^3[/tex]
= 16153.359375
Therefore, compound interest by first bank = 16153.359375- 15000= 1153.359375
While, Compound Interest rate in second saving bank = 3.8% for 1st year 1% extra for each extra year.
Thus, the total amount by the second bank= [tex]1500(1+\frac{3.8}{100} )(1+\frac{4.8}{100})(1+\frac{5.8}{100})[/tex]=17263.76688
Therefore compound interest by the second bank = 17263.76688-15000=2263.76688
Since, compound interest by first bank < compound interest by the second bank
Thus, he will get more interest in second bank than first bank.
