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9 May, 11:02

David saves money from his teaching job to buy a new boat when he retires in 20 years. The boat will cost $30,000. He has $12,000 in his simple interest savings account. To reach his goal by retirement, David should

move his money to a compound interest account (T/F)

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  1. 9 May, 11:58
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    True

    Explanation:

    The main advantage of a compound interest account is that the interest that you earn also earns interest, so the total amount of earned interest increases.

    For example, a $10,000 account earning simple interest at a 4% rate will earn $4,000 in ten years. While the same amount in a compound interest account will earn $4,802.
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