In your own words, explain the difference between compound and simple interest. Explain the three components of an interest rate and why is it important that accountants understand these components. Using the example of a $1,200 investment made today at 6 percent interest, what would be the amount of the investment at the end of 5 years if the interest on this investment is calculated using compound interest and also if the interest is calculated on this investment using simple interest. Explain the reason for the difference in the two methods