Sancho deposits $500 in a bank account today which pays 4 percent interest, compounded annually. The amount of interest Sancho earns in year 4 will be: I. equal to the interest earned in year 3. II. greater than the interest earned in year 3. III. less than the interest earned in year 3. IV. greater than the interest earned in year 5. V. less than the interest earned in year 5.

a. II and IV only

b. I only

c. III and V only

d. III and IV only

e. II and V only