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    Explain which of the two cases below yields a higher interest amount for an initial investment and why.

    1. A simple interest rate of 13% paid at the end of one year
    2. A monthly interest rate of 1% on the balance at the end of each month for one year.

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    Solution Preview

    When looking at interest rates, it is important to compare your options, such as those offered in this question. When the simple interest rate is taken at the end of the year, as in the first part of the question, the interest for the ...

    Solution Summary

    This solution explains which of the two investment options will yield more interest.