Answer
a) Harry has 1,050 dollars, Ron has 1,080 dollars, and Hermione has 1,200 dollars.
b) If the interest rate $r$ is greater than a student's investment return, then the student would loan their money (to maximize their return). If the interest $r$ is less than a student's investment return, then the student would invest their money (to maximize their return)
Work Step by Step
a)
Harry
$1000*1.05$
$1050$
Ron
$1000*1.08$
$1080$
Hermione
$1000*1.20$
$1200$