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Kristi invests $3,000 at a 7.25% annual simple interest rate, and her sister Kari invests $3,200 at a 6.25% annual simple interest rate. Which of the two will earn the greater amount of interest after one year?

1 Answer

6 votes

Answer:

Kristi

Explanation:

The formula for Simple Interest =

Principal × Rate × Time

For Kristi

Kristi invests $3,000 at a 7.25% annual simple interest rate,

Principal = $3000

Rate = 7.25% = 0.0725

Time = 1

Simple interest = $3000 × 0.0725 × 1

= $217.5

For Kari

Her sister Kari invests $3,200 at a 6.25% annual simple interest rate.

Principal = $3200

Rate = 6.25% = 0.0625

Time = 1

Simple interest = $3200 × 0.0625 × 1

= $200

From the above calculation, we can see that: Kristi will earn the greater amount of interest after one year

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