Answer:
Simple interest will double the amount soon as the interest rate is higher than the compounding interest.
Step-by-step explanation:
In a simple term of 5 years
Investing $500
In simple interest @ 6% value at end of 5 years = $500
6% = $30
For 5 years = $30
5 = $150
Value = $500 + $150 = $650
In compounding interest, we have
Future value factor for 5 years @ 5% = 1.276
Value at end of 5 years = $500
1.276 = 638.14
The value is higher in case of simple interest thus, simple interest will double the money soon.