Linda invested $15,000 today, in an investment that pays 6.50 percent interest,

Question

Linda invested $15,000 today, in an investment that pays 6.50 percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment? Linda will receive equal interest payments every six months over the life of the investment.
Linda would have earned more interest if she had invested in an account paying 6.50 percent simple interest.
Linda will earn more interest in year 5 than she will in year 4.
Linda would have earned more interest if she had invested in an account paying annual interest.
Linda will earn less and less interest each year over the life of the investment.

Explanation / Answer

Linda will earn more interest in year 5 than she will in year 4.

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