Question

Lee and Lyn both invested their birthday money. Lee put his money in a savings account that earned 8% simple interest annually. Lyn put her money in an account that earned 8% interest compounded annually. Who made the better investment and why?

Answer 1

Lyn made a better investment.

Her money will grow quicker than Lee because the money grows by 8% annually, and then the next year 8% off of the new balance.

Lee's money will only grow by 8% from the original price.