Answer:
The 3 years investment earns more interest
Step-by-step explanation:
Given
Principal, P = $5,000
Required
Determine which earns more interest
When Rate = 1.75% and Year = 2
Interest is as follows;
[tex]I = \frac{PRT}{100}[/tex]
Substitute 1.75 for R, 5000 for P and 2 for T
[tex]I = \frac{5000 * 1.75 * 2}{100}[/tex]
[tex]I = \frac{17500}{100}[/tex]
[tex]I = \$175[/tex]
When Rate = 1.25% and Year = 3
Interest is as follows;
[tex]I = \frac{PRT}{100}[/tex]
Substitute 1.25 for R, 5000 for P and 3 for T
[tex]I = \frac{5000 * 1.25 * 3}{100}[/tex]
[tex]I = \frac{18750}{100}[/tex]
[tex]I = \$187.5[/tex]
Comparing the interest of both investments, the 3 years investment earns more interest
