Question

Money is put into two accounts. Account A earns 3.5% interest annually, and account B ears 2.6% interest annually. Assuming $20,000 is split evenly among the accounts and interest is not compounded, how much interest would be earned in total after 6 years?

Answer 1

The total interest earned in both accounts after 6 years would be $2,100 + $1,560 = $3,660.

Explanation:

After 6 years, the total interest earned on account A would be:

Interest = Principal x Rate x Time

Interest = $10,000 x 0.035 x 6

Interest = $2,100

The total interest earned on account B would be:

Interest = Principal x Rate x Time

Interest = $10,000 x 0.026 x 6

Interest = $1,560

Therefore, the total interest earned in both accounts after 6 years would be $2,100 + $1,560 = $3,660.