Question

suppose you have 1000$ in each of two accounts, A and B. Account A earns simple interest , and account B earns compound interest. Which of the following statements is most accurate?
a) account A ( simple interest) will earn more money at first
b) account B ( compound interest) will earn more money always
c) both accounts will earn the same amount in the first year
d) there is not enough information to conclude any other statements

Answer 1

C, because compound will take place and give account B more money in the second year, as it gives you interest on top of the interest from the last year that has already been added to the money in your bank account. In the first year they will both have the same amount of money from interest even though they have different types of interest.

I hope that makes sense? xD

Answer 2

But doesn't compound interest always make more cause its adding more interest to the already large amount cause it adds up?