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Melissa has $1,000.00 to invest for 5 years. She can choose either simple interest at 6.4% interest, or compound interest at 12.8% interest, compounded annually.

Which is the better investment?

A. A compound interest investment would be better, because Melissa would earn $826.19 in compound interest.

B. A simple interest investment would be better, because Melissa would earn $826.19 in simple interest.

C. A simple interest investment would be better, because Melissa would earn $320.00 in simple interest.

D. A compound interest investment would be better, because Melissa would earn $320.00 in compound interest.

1 Answer

2 votes

Answer:

A

Explanation:

simple interest

1000 x 6.4% x 5 = 320

compound int

1000(1+12.8/100)^5 - 1000=826.188

User Fredrik Stolpe
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