Simple vs Compound Interest: Best Investment Choice
Simple vs Compound Interest: Best Investment Choice
TGM Original
Gerald has \(\$20 \; 000\) to invest in Company \(\mathrm{A}\) or Company \(\mathrm{B}\).
Company \(\mathrm{A}\) offers \(3.8\%\) per annum simple interest.
Company \(\mathrm{B}\) offers \(3.5\%\) per annum compound interest compounded half-yearly. Gerald would like to invest this amount of money for a period of \(5\) years.
Which company should he invest in? Explain your answer.
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Answer:Company A
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