Question

Darryl deposits $1,500 into a savings account that has a simple interest rate of 2.7%. Lori deposits $1,400 into a savings account that has a simple interest rate of 3.8%. If no other transactions are made, who will have more money in their account after 10 years? How much more? Use the drop-down menus to explain your answer.

Answer 1

Answer: Lori gets more more in her saving account than Darry has.

Lori has $27 more than Darryl

Explanation:

Darry does :

Amount of deposits into a saving account = $1500

Rate of interest = 2.7%

Number of years = 10

As we know the formula for "Simple Interest ",i.e.

`I=(P* R* T)/(100)`

So, we put the values in this formula to get our answer :

`I=(1500* 2.7* 10)/(100)\\\\I=\$405`

As we know how to calculate the "Amount" i.e.

`Amount=Principle+Interest\\\\Amount=1500+405=\$1905`

Similarly,

Lori does:

Amount of deposits into a saving account = $1400

Rate of interest = 3.8%

Number of years = 10

As we know the formula for "Simple Interest ",i.e.

`I=(P* R* T)/(100)`

So, we put the values in this formula to get our answer :

`I=(1400* 3.8* 10)/(100)\\\\I=\$532`

As we know how to calculate the "Amount" i.e.

`Amount=Principle+Interest\\\\Amount=1400+532=\$1932`

Hence, Lori gets more more in her saving account than Darry has.

`1932-1905=\$27`

Lori has $27 more than Darryl .