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Tim wants to invest some money that his grandmother gave him. He has and can put it in an account with simple interest or an account with compound interest.  

  1. The simple interest account has an interest rate of . With this interest rate, what is the total amount in the bank after 5 years?

    Add the interest he earns to his initial principal to find the total amount he would have after 5 years.

  2. The compound interest account is also for 5 years (compounded yearly), but it has an interest rate of . Find the total amount that he would have in this account.

  3. Which account is a better investment?

    Which account has more money after 5 years?