Your answer: (CHAPTER 5) Bank #1 offers a 3% simple interest to all its depositors. Bank #2 offers also a 3% interest, but it has annual compounding. If you deposit your money for a number of years, which of these two banks would you choose? (a) It doesn't matter (b) Bank #1 (c) Bank #2 Now, why is that? (a) You would earn a lower amount of interest over the years (b) You would earn the same amount of interest over the years (c) You would earn a higher amount of interest over the years Now, let's calculate! (Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher. Only round your final answer to TWO decimal places: for example, $10,000.23.) So, if you deposit $7,000 today, and leave it in the account for 20 years, how much will you have at the end of 20 years in Bank #1? (a) $10,080.00 (b) $11,200.00 (c) $11,378.50 (d) $12,642.78 If, instead, you choose Bank #2, how much will you have in 20 years? (a) $12,642.78 (b) $11,378.50 (c) $11,200.00 (d) $10,080.00