Principal	Interest Year 1	Interest Year 10	Interest Year 20	Total Savings After 20 Years
$12,000 in Simple Interest Account	$12,000 x 5% = $600 = $12,600	$12,000 x 5% = $6000 = $18,000	$12,000 x 5% = $12000 = $24,000	$12,000 + 20 years of simple interest = $24,000
$12,000 in Compound Interest Account	$12,000 x 5% = $600 = $12,600	($12,000 + $6,615.94) $18,615.94 x 5% = $19546.74	($12,000 + $18,323.40) $30,323.40 x 5% = $31,839.57	$12,000 + $20 years of compound interest $31,839.57

David saves money from his teaching job to buy a new boat when he retires in 20 years. The boat will cost $30,000. He has $12,000 in his simple interest savings account. To reach his goal by retirement, David should...

	keep his money where it is and be patient
	move his money to an IRA or Certificate of Deposit
	move his money to a compound interest account
	move his money to a business checking account