Question

You get $1000 with 3% interest per year or $800 with 6% yearly interest for 5 years, which option is better

Answer 1

The first option

Explanation:

Suppose the question is about simple interest, then the first option will be:

1000 * (1 + 0.03*5) = $1150

The second option will be:

800 * (1 + 0.06*5) = $1040

Answer 2

Explanation:

Not sure if this is right**

Based on what I know from these types of questions I think that the 2nd option is better. When reading you might think that the first option is better because it gives 1k and the other one only gives you 800. but the percentage of the interest is bigger so i feel like it might increase, meaning more money.

hopefully u can understand that and if wrong i'm sorry.