For Melissa:
- Year 1: Interest = $50,000 × 0.02 = $1,000
- Year 2: Interest = $50,000 × 0.02 = $1,000
- Year 3: Interest = $50,000 × 0.02 = $1,000
For Greg:
- Year 1:
- Amount = $50,000 × (1 + 0.02) = $51,000
- Interest = $51,000 - $50,000 = $1,000
- Year 2:
- Amount = $50,000 × (1 + 0.02)^2 = $52,020
- Interest = $52,020 - $51,000 = $1,020
- Year 3:
- Amount = $50,000 × (1 + 0.02)^3 = $53,060.40
- Interest = $53,060.40 - $52,020 = $1,040.40
Comparing the interest earned by Melissa and Greg for each year:
- For the first two years, they earn the same amount of interest: $1,000.
- In the third year, Greg earns more interest: $1,040.40 compared to Melissa's $1,000.
Therefore, for the first two years, Melissa and Greg earn the same amount of interest, but in the third year, Greg earns more interest.
