Mathematics for IGCSE & O level - Percentages (Section 6 - No. 37)

Salim has $4000 to invest for 5 years. He has two options: 3.5% simple interest or 3.25% compound interest. Which is the better option?
3.5% simple interest
3.25% compound interest
They are the same
Not enough information

Explanation

3.5% simple interest yields a higher return after 5 years ($4700 vs. $4693.65 for compound interest).

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