Response to the following questions:
1. If you are offered two investments, one that pays 5% simple interest per year and one that pays 5% compound interest per year, which would you choose? Why?
2. Suppose you make a deposit today in a bank account that pays compounded interest annually. After one year, the balance in the account has grown.
a. What has caused it to grow?
b. After two years, the balance in the account has grown even more. What has caused the balance to increase during the second year?