How does the interest earned with simple interest compare to that earned with compound interest over time?(1 point)

Question

Responses

Simple interest always earns more than compound interest.
Simple interest always earns more than compound interest.

Compound interest can significantly increase total earnings over time compared to simple interest.
Compound interest can significantly increase total earnings over time compared to simple interest.

Compound interest is only beneficial for short-term investments.
Compound interest is only beneficial for short-term investments.

Simple interest and compound interest earn the same amount over time.

Answer 1

The correct response is:

Compound interest can significantly increase total earnings over time compared to simple interest.

This is because compound interest takes into account interest earned on previously earned interest, which can lead to greater accumulation of wealth over time, especially with longer investment periods.