Jim could earn $3.2355 more interest by depositing his money in a 3-month CD that pays 3.26% simple interest every 3 months compared to Russell's savings account.
There are a few steps to solve this problem:
1. Calculate Russell's total interest from the savings account:
Daily interest: 1.25% / 100 = 0.0125
Annual interest: 0.0125 * 365 = 4.5625%
Total interest earned in 12 months: $1,500 * 4.5625% = $68.4375
2. Calculate Jim's total interest from the CD:
Interest rate per period: 3.26% / 3 = 1.0867%
Total number of interest periods: 12 months / 3 months per period = 4 periods
Total interest earned: $1,500 * 1.0867% * 4 = $65.202
3. Calculate the difference in interest:
Difference: $68.4375 - $65.202 = $3.2355
Therefore, Jim could earn $3.2355 more interest by depositing his money in a 3-month CD that pays 3.26% simple interest every 3 months compared to Russell's savings account.