Select one savings option from the Simple Interest column and one from the Compound
Select one savings option from the Simple Interest column and one from the Compound Interest column to compare: Simple Interest Compound Interest Option A—earns 2.5% simple interest per year Option D—earns 2% compound interest per year Option B—earns 3% simple interest per year Option E—earns 2.5% compound interest per year Option C—earns 3.5% simple interest per year Option F—earns 3% compound interest per year Part Two—Crunch the Numbers Calculate the after-tax real rate of return earned on $5,000 by your selected savings options over a period of three years. This will help your comparison. Remember, the real rate of return includes taxes on the interest earned and inflation. For this assignment, use a tax rate of 10% and an average inflation rate of 3%. You will submit your calculations as part of your assignment.