A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily. true false?

Question: A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily. true false?

True. A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily. 

When interest is compounded, the interest earned on the account is added to the principal, and the total amount earns interest going forward. This means that the account earns interest on the interest, leading to a higher return over time. 

In contrast, with simple interest, the interest earned is based solely on the principal amount, and does not earn interest on the interest. This typically results in a lower overall return compared to compounding interest.

Therefore, if you are looking to maximize your earnings from a savings account, it is generally recommended to choose an account that compounds interest rather than one that pays simple interest.

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