Derek just opened a retirement account paying 3.5 percent interest, compounded annually. After four years, the retirement account will be worth $5,000. Assume there are no additional deposits or withdrawals in the account. Given this, Derek:

will earn simple interest on his savings every year for four years. could earn more interest on this account if the interest earnings were withdrawn annually. has an account currently valued at $5,000. will earn the same amount of interest each year for four years. O could have deposited less money today and still had $5,000 in four years if the account paid a higher rate of interest