You have 1000 that you want to deposit in a savings account. Bank A computes the amount value of your investment using the amount function $A_1(t) = 1+0.049t$ whereas Bank B uses the amount function $A_2(t) = > (1.4)^{12t}$. Where should you put your money?
Correct answer : B
I solved just by comparing effective interest rate for first period, $i_1 = \frac{A(1)-A(0)}{A(0)}$ but couldn't either one of them become larger depending on which period you choose? What is the proper way to solve this problem?