A bank offers interest rates of 1.25% p.a. for 60-day GICs and 1.50% p.a. for 120-day GICs for investments of $100,000 to $249,999. Chang is considering the following two investment options at this bank: Option A: Invest $150,000 in a 120-day GIC. Option B: Invest $150,000 in a 60-day GIC, then invest the maturity amount in a second 60-day GIC, assuming that the interest rate remains constant over the second 60-day period. In which of the above two options will he earn more and by how much?

AppendixLO1