Mathematics for IGCSE & O level - Percentages (Section 3 - No. 30)

Salim has $4000 to invest for 5 years. The bank offers two options: 3.5% simple interest or 3.25% compound interest. Which option is better?
3.5% simple interest
3.25% compound interest
They are the same
Cannot be determined

Explanation

Simple interest yields a higher return in this instance.

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