Chapter 11 - Section 11.1 - Solving Quadratic Equations by Completing the Square - Exercise Set - Page 767: 95

Compound

If the account was paying simple interest, I would only earn 4% on the principal amount year after year. If the account was paying compound interest, the second year would have the interest from the first year added to the principal, so the interest from the second year would be more than the interest earned in the first year.