Andover Bank and Lowell Bank each sell one-year certificates of deposit (CDs). The interest rates on these CDs are given in the following table for a three-year period.

Suppose you deposit $1,000 in a CD in each bank at the beginning of 2016. At the end of 2016, you take your $1,000 and any interest earned and invests it in a CD for the following year. You do this again at the end of 2017. At the end of 2018, will you have earned more on your Andover Bank CDs or on your Lowell Bank CDs? Briefly explain.

Transcribed Image Text:

Bank 2016 2017 5% 6% 2018 5% Andover Bank Lowell Bank 2% 7%