Which bank should Viv invest her €2000 in to have the most amount of money after 3 years?

Answer

To determine which bank Viv should invest in, we need to calculate the amount of money she will have after 3 years with each bank using the given compound interest rates. **1. Calculation for the International Bank:** - **Year 1:** €2000 + 4% = €2000 imes 1.04 = €2080 - **Year 2:** €2080 + 1% = €2080 imes 1.01 = €2090.80 - **Year 3:** €2090.80 + 1% = €2090.80 imes 1.01 = €2099.70 Thus, at the end of 3 years with the International Bank, Viv will have approximately **€2099.70**. **2. Calculation for the Friendly Bank:** - **Year 1:** €2000 + 5% = €2000 imes 1.05 = €2100 - **Year 2:** €2100 + 0.5% = €2100 imes 1.005 = €2101.05 - **Year 3:** €2101.05 + 0.5% = €2101.05 imes 1.005 = €2102.10 Thus, at the end of 3 years with the Friendly Bank, Viv will have approximately **€2102.10**. **Comparison:** - Amount from International Bank: €2099.70 - Amount from Friendly Bank: €2102.10 Since €2102.10 > €2099.70, Viv should invest her €2000 in the **Friendly Bank** to have the most amount of money after 3 years.