Today, Edward invested $30,000 in an account that pays simple interest of 10 percent per year. At the same time thatEdward made his investment, Sarah also invested $30,000 in an account that pays compound interest of 10 percent peryear compounded annually. One year after their investment, who will have more money in their account?O They both will have the same amount of money in their account.O Sarah will have more money in her account than Edward.O The information is not sufficient to answer the question.O Edward will have more money in his account than Sarah.

Simple interest : Compound interest is the interest calculated on the principal and the interest…

Answered: dward made his investment, Sarah also…

dward made his investment, Sarah also inv ear compounded annually. One year after t O They both will have the same amount O Sarah will have more money in her ac

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Today, Edward invested $30,000 in an account that pays simple interest of 10 percent per year. At the same time that
Edward made his investment, Sarah also invested $30,000 in an account that pays compound interest of 10 percent per
year compounded annually. One year after their investment, who will have more money in their account?
O They both will have the same amount of money in their account.
O Sarah will have more money in her account than Edward.
O The information is not sufficient to answer the question.
O Edward will have more money in his account than Sarah.

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