Concept explainers
Account 1: You deposit $1,000 into an account that pays 5% simple interest on that $1,000 each year.
Account 2: You deposit $1,000 into an account that pays 5% of the account balance at the beginning of the current year in interest each year.
Here’s a way to describe the difference in growth of the two accounts: Account 1 increases in value by
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