Lea's bank offers interest rates of 1.50% p.a. for one-year GICs and 1.85% p.a. for two-year GICs for investments of $5000 to $99,000. Lea is considering the following two investment options: Option A: Invest $50,000 in a two-year GIC. Option B: Invest $50,000 in a one-year GIC, then invest the maturity amount in a second one-year GIC, assuming that the interest rate remains constant over the second one-year period. In which of the above two options will she earn more and by how much?

AppendixLO1