Question

You have some money to invest in one of two accounts. The first account pays

5% simple interest, and the second pays 4% compound interest. How would
you decide which account to use? Discuss your answer.

Answer 1

the simple interest function will be greater in the beginning, but the

compound interest equation will overtake the simple after a while.

it appears that the 4% compound equation will overtake the simple at about 10 years

Explanation:

`1 + .05t = 1(1.04)^t`

Answer 2

compound interest

Explanation:

compound interest yields higher profit than simple interest