John wants to invest £100 into a savings account for 15 years. If he invests in saving account A he will receive 3.5% simple interest and if he invests in savings account B he will receive 3% compound interest. Which account should he choose and why?
100 + (3.5 x 15) = 152.50 100 x 1.0315 = £155.80 Therefore he should choose savings account B because after 15 years he will have gained more money through interest than in account A.
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