Final answer:
To decide between simple interest and compound interest investments, calculate the final amounts using the appropriate formulas and compare the results.
Explanation:
To decide between investing in an account with 5% simple interest or 4% compound interest, calculate the final amount from each option after one year. For the simple interest account, the final amount is calculated using the formula Final Amount = Principal x (1 + (Interest Rate x Time)). For the compound interest account, the final amount is calculated using the formula Final Amount = Principal x ((1 + Interest Rate)^Time). Compare the final amounts from both accounts to determine which option yields higher returns.
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