Answer:
Since the Bank of Peace will pay Marco more in interest over the 3-year period, Marco should choose the Bank of Peace to get the most interest
Explanation:
To determine which bank will give Marco the most interest over the 3-year period, we need to calculate the total amount of interest that each bank will pay Marco over the 3 years.
First, let's consider the Bank of Peace. Since the interest rate is 2.5% per year and is compounded annually, Marco will earn 2.5/100 * £15000 = £375 in interest in the first year. In the second year, the interest will be calculated on the original £15000 plus the £375 of interest earned in the first year, for a total of £15000 + £375 = £15375. So Marco will earn 2.5/100 * £15375 = £383.44 in interest in the second year. In the third year, the interest will be calculated on the original £15000 plus the £375 of interest earned in the first year and the £383.44 of interest earned in the second year, for a total of £15000 + £375 + £383.44 = £15728.44. So Marco will earn 2.5/100 * £15728.44 = £391.71 in interest in the third year.
Therefore, the total amount of interest that Marco will earn from the Bank of Peace over the 3-year period is £375 + £383.44 + £391.71 = £1150.15.
Now let's consider the Bank of Trust. In the first year, Marco will earn 3.8/100 * £15000 = £570 in interest. In the second year, the interest rate is 1%, so Marco will earn 1/100 * £15000 = £150 in interest. In the third year, Marco will also earn £150 in interest.
Therefore, the total amount of interest that Marco will earn from the Bank of Trust over the 3-year period is £570 + £150 + £150 = £870.