Nancy wants to receive the most return on a $50,000 investment. She has two options. Option 1 gives annual interest at 5% compounded yearly. Option 2 gives annual interest at 3.5% compounded monthly. Which option is better after 3 years, and what is the difference in earned interest?

Group of answer choices:

Option 1 earns more interest by $2,354.21.

Option 1 earns more interest by $3,581.52.

Option 2 earns more interest by $2,354.21.

Option 2 earns more interest by $3,581.52.