Answer
$A=1000\cdot e^{(0.1)(3)}\approx \$1349.8$
This amount is more than $\$ 1325 $, so the first option is better.
Work Step by Step
We use the compound interest formula:
$A=Pe^{rt}$
We are given the following information:
$t=3\text{ years} \\ r=10\%=0.1 \\ P=\$1000$
Plugging these values into the compound interest formula gives:
$A=1000\cdot e^{(0.1)(3)}\approx \$1349.8$,
This amount is more than $\$ 1325 $, so the first option is better.
