document.write( "Question 1135874: Hi,
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\n" ); document.write( "\n" ); document.write( "Decide whether the statement makes sense, and explain your reasoning. John is planning to invest his money for one year only. He chose an account paying simple interest at 6% per year which was clearly a better deal than an account paying a 5.9% APR with interest compounded annually.\r
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Algebra.Com's Answer #753573 by Edwin McCravy(20056)\"\" \"About 
You can put this solution on YOUR website!
Simple interest formula          Compound interest formula\r\n" );
document.write( "  A = P∙(1+r∙t)                           A = P∙(1+r/n)nt\r\n" );
document.write( "  A = P∙(1+0.06∙t)                        A = P∙(1+0.059/1)(1)t\r\n" );
document.write( "                                          A = P∙(1.059)t \r\n" );
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document.write( "After 1 year\r\n" );
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document.write( "  A = P∙(1+0.06∙1)                        A = P∙(1.059)1\r\n" );
document.write( "  A = P∙(1.06)                            A = P∙(1.059)\r\n" );
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document.write( "Multiplying the principle by 1.06 is slightly better than multiplying by 1.059. So\r\n" );
document.write( "the simple interest is a slightly better deal ONLY because he is planning to\r\n" );
document.write( "invest his money for one year only.  If he were planning to invest his money for\r\n" );
document.write( "two years or more, then the compound interest would be slightly better. \r\n" );
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document.write( "Edwin
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