The I.C. James Co. invested $10,000 six years ago at 5% simple interest. The I.M. Smart Co. invested $10,000 six years ago at 5% interest which is compounded annually. Both the I.C. James Co. and the I.M. Smart Co. will earn $500 interest in the first year.

Question

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Both companies will earn $500 in the first year because simple interest and compound interest are the same in the first year, calculated as $10,000 * 5% = $500.

The IC James Co