South Central Bank Pays 2

Multiple Choice

South Central Bank pays 2.5 percent interest, compounded annually, on its savings accounts.Northern Bank pays 2.5 percent simple interest on its savings accounts.You want to deposit sufficient funds today so that you will have $1,500 in your account 2 years from today.The amount you must deposit today:

A) is the same regardless of which bank you choose because they both pay the same rate of interest.
B) is the same regardless of which bank you choose because they both pay simple interest.
C) is the same regardless of which bank you choose because the time period is the same for both banks.
D) will be greater if you invest with South Central Bank.
E) will be greater if you invest with Northern Bank.