Rohan has $100 that he wants to save in a bank . Bank A offers two types of savings accounts. One has a 5% simple interest rate,
and the other has a 4.8% compound interest rate. Bank B also offers two types of savings accounts. One has a 3% simple interest rate, the other has a 4% compound interest rate. Which account should Rohan choose in order to earn the most interest.
The most appropriate choice of account for Rohan depends on Rohan's money saving period. If he wants to save his money for less than 2 years then he should choose the Bank A's 5% simple interest account. This account gives 10$ interest in 2 years and 15$ interest in 3 years. If he wants to save his money for more than 2 years then he should choose the Bank A's 4.8% compound interest account. This account gives $9.83 interest in 2 years, $15.1 interest in 3 years, and this account gives more interest than the simple interest account in period above the third year.
