To determine which account would be a better investment for Phoebe, we need to calculate the future value of each account after one year and compare them.
Account A earns simple interest, which means that the interest is calculated only on the initial investment. After one year, the investment in Account A would be worth:
$10,000 + ($10,000 x 0.09) = $10,900
Account B earns interest that is compounded annually, which means that the interest is calculated on the initial investment plus any previously earned interest. After one year, the investment in Account B would be worth:
$10,000 x (1 + 0.09)^1 = $10,900
As we can see, both accounts would have the same value of $10,900 after one year. Therefore, the choice between the two accounts depends on Phoebe's investment goals and preferences.
If Phoebe wants a simple and straightforward investment that provides a guaranteed return, Account A would be the better choice.
If Phoebe is willing to take on some risk and wants the potential for higher returns, Account B would be the better choice as the compounding of interest can lead to a higher return over a longer period of time.