Question

You have 2 different savings accounts. For Account​ A, the simple interest earned after 21 months is ​$5.95. For Account​ B, the simple interest earned after 30 months is ​$36.00. If the interest rate is ​%3.4 for Account A and ​%2.4 for Account​ B, how much is the principal in each​ account? Which account earned you the most interest the first​ month? Explain your answer.

Answer 1

Principal amount is A = $250.09

Principal amount is B = $400.

Account B earned you the most interest the first​ month

The formula for simple interest is expressed as

I = PRT/100

Where

P = the principal or initial amount of money invested.

R = interest rate

T = time

On account A,

I = $6.94

R = 3.7%

T = 9 months = 9/12 = 0.75 years.

Using the formula:

On account B,

I = $13.80

R = 2.3%

T = 18 months = 18/12 = 1.5 years

Using the formula:

To determine the account that earned more interest in the first month we divide the interest by the number of months.

$6.94/9 = $0.7711

$13.80/18 = $0.7667

Account B earned you the most interest the first​ month because $0.7667 is higher than $0.7711.

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Hope it helps.

Answer 2

Answer: Principal amount is A = $250.09

Principal amount is B = $400.

Account B earned you the most interest the first​ month

The formula for simple interest is expressed as

I = PRT/100

Where

P = the principal or initial amount of money invested.

R = interest rate

T = time

On account A,

I = $6.94

R = 3.7%

T = 9 months = 9/12 = 0.75 years.

Using the formula:

On account B,

I = $13.80

R = 2.3%

T = 18 months = 18/12 = 1.5 years

Using the formula:

To determine the account that earned more interest in the first month we divide the interest by the number of months.

$6.94/9 = $0.7711

$13.80/18 = $0.7667

Account B earned you the most interest the first​ month because $0.7667 is higher than $0.7711.