Question

Two brothers, Charles and David, each inherit $5000. Charles invests his inheritance in a savings account with an annual return of 2.1 %, while David invests his inheritance in a CD paying 5.4 % annually. How much more money than Charles does David have after 1 year?

Answer 1

Answer: $165

Step-by-step explanation:

It appears that the interest rate is simple interest, that is calculated at the end of each year.

if that is the case, then Mark will receive an interest payment of $5000 x 2.1 = $105

Charles will receive an interest payment of $5000x 0.054 = $270

so, Charles will receive $270 - 105 = $165 more than Mark