Exercise 3-8 (Algo) Compare investment alternatives LO 2 A friend has $1,250 that he has saved from his part-time job. He will need his 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 2.50% interest or to lend it to Victor. Victor has promised to repay $1,300 after six months. Required: a. Calculate the interest earned on the savings account for six months. (Round your answer to 2 decimal places.) b. Calculate the annual rate of return if the money is lent to Victor. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Which alternative would you recommend? a Interest eamed b. Rate of return on an annual basis Recommended alternative