Answer
(a) 3000
(b) 2318
(c) He earns 682 dollars more by lending the money to his sister.
Work Step by Step
(a) The amount he would earn from his sister is:
$$ = 25,000 \times (1+(.04)(3))-25,000 \\ =3,000$$
(b) The amount he would earn from the credit union is:
$$ =25,000\times (1.035^3) -25,000 \\ = 2,318$$
(c) We see that the investment with his sister earns 682 dollars more.
