Question

Tommy earned $14.80 in interest after 4 years on a principal of $100. His simple interest 4 rate is 3.7%. Jane earned $140.40 in interest after 3 years on a principal of $1,200. Her simple 3 interest rate is 3.9%. Which bank would you rather use, Tommy's or Jane's? Explain your reasoning.

Answer 1

Given:

Tommy earned $14.80 in interest after 4 years on a principal of $100. His simple interest rate is 3.7%

Jane earned $140.40 in interest after 3 years on a principal of $1,200. Her simple 3 interest rate is 3.9%.

So, the simple interest rate of Jane's is greater than the simple interest rate of Tommy's because 3.9% > 3.7%

so, the bank that would be used is Jane's bank