Answer:
Option 2
Step-by-step explanation:
The account balance multiplier for the compound interest option is ...
(1 +r)^t = 1.05^8 ≈ 1.477455
The account balance multiplier for the simple interest option is ...
(1 +rt) = 1 +0.06·8 = 1.48
Jadwa should choose option 2 for this investment. It will earn about £5.09 more in interest over the 8-year period.
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£2000 · (1.48 -1.477455) ≈ £5.09
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In the above formulas, r is the interest rate, and t is the number of years.
