Question - A friend has $1,100 that has been saved from her part-time job. She will need her money, plus any interest earned on it, in six months and has asked for your help in deciding whether to put the money in a bank savings account at 3.8% interest or to lend it to Simone. Simone has promised to repay $1,139 after six months
Required:
a. Calculate the interest earned on the savings account for six months.
b. Calculate the rate of return if the money is lent to Simone.
c. Which alternative would you recommend?