Answer
The first option is better.
Work Step by Step
According to the Formula for compounding continuously, where $P$ is the principal, the amount deposited, $r$ is the annual interest rate, $t$ is the number of years, $A$ is the amount you get back after $t$ years: $A=P\cdot e^{r\cdot t}.$
Here we have:
$t=3\text{ years}$
$r=10\%=0.1$
$P=\$1000$
Substitute these values into the formula above to obtain:
$A=1000\cdot e^{0.1\cdot 3}\approx \$1349.8$, which is more than $1325 \$$, hence the first option is better.