Answer:
The 6% simple interest account earns more interest in 2 years.
Step-by-step explanation:
You can compare the multipliers in the interest formulas.
For simple interest, the amount in the account (A) starting with principal P and earning at rate r for t years will be ...
A = P(1 +rt)
For the values given, r=.06 and t=2, the multiplier is ...
1 +rt = 1 +.06·2 = 1.12
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For interest compounded annually, the amount will be ...
A = P(1 +r)^t
For the given values, the multiplier is ...
(1+r)^t = (1.04)^2 = 1.0816
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Since 1.12 > 1.0816, the account earning simple interest will earn more interest.
