On a certain day, Tim invested $500 at 10 percent annual interest, compounded annually, and Lana invested 1,000 at 5 percent annual interest, compounded annually.The total amount of interest earned by Tim’s investment in the first 2 years was how much greater than the total amount of interest earned by Lana’s investment in the first 2 years?  Choose the correct choice from the following choices:
A) $2.5	B) $15	C) $50	D) $100	E) $105
Compounded annually means that the interest is applied once per year. One can have 10% annual interest compounded monthly - in this case 10%/12 would be applied each month, or 10% annual interest compounded daily etc.   With respect to the problem at hand, at the end of two years, Tim would have   500(1.10)^2 = 500(1.21) = 605   and Lana would have   1,000(1.05)^2 = 1,000(1.1025) =1102.5   Thus, Tim earned 105 dollars, while Lana earned 102.5 dollars   The difference is $2.5 and the answer is $2.5.
<result>A</result>
On a certain day, Tim invested $500 at 10 percent annual interest, compounded annually, and Lana invested 1,000 at 5 percent annual interest, compounded annually.The total amount of interest earned by Tim’s investment in the first 2 years was how much greater than the total amount of interest earned by Lana’s investment in the first 2 years?