A bank account earned $2\%$ annual interest, compounded daily, for as long as the balance was under $\$1,000,$ start

A bank account earned $2\%$ annual interest, compounded daily, for as long as the balance was under $\$1,000,$ starting when the account was opened. Once the balance reached $\$1,000,$ the account earned $2.5\%$ annual interest, compounded daily until the account was closed. No deposits or withdrawals were made. Was the total amount of interest earned at the $2\%$ rate greater than the total amount earned at the $2.5\%$ rate?

(1) The account earned exactly $\$25$ in interest at the $2.5\%$ rate.
(2) The account was open for exactly three years.

Answer: C

Source: Official Guide

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