Question

How much more will $28,000 earn in interest than $16,000 if both are

invested in savings accounts with APYs of 5.8% for a year?​

Answer 1

$696.

Explanation:

We are asked to find the amount of interest earned on $28,000 than $16,000 with APYs of 5.8% for a year.

We will use simple interest formula to solve our given problem.

`I=Prt`

`I` = Amount of interest,

P = Principal amount,

r = Interest rate in decimal form,

t = Time in years.

`5.8\%=(5.8)/(100)=0.058`

Let us find difference of interests as:

`\$28,000* 0.058-\$16,000* 0.058`

`(\$28,000-\$16,000)* 0.058`

`(\$12,000)* 0.058`

`\$696`

Therefore, it will earn $696 more in interest.

Answer 2

Final answer is $12696.

Explanation:

Given that initial amount P = $28000

Interest rate r = 5.8% = 0.058

Time = 1 year

Then future value is given by :

`A=P\left(1+r\right)^t`

`A=28000\left(1+0.058\right)^1=29624`

Similarly calculate future value for 2nd case:

Given that initial amount P = $16000

Interest rate r = 5.8% = 0.058

Time = 1 year

Then future value is given by :

`A=P\left(1+(r)/(n)\right)^(n\left(t\right))`

`A=16000\left(1+0.058\right)^1=16928`

then difference = 29624 - 16928 = 12696

Hence final answer is $12696.