Question

Monica deposits ​$300 into a savings account that pays a simple interest rate of ​3.9%. Paul deposits ​400$ into a savings account that pays a simple interest rate of ​3.2%. Monica says that she will earn more interest in 1 year because her interest rate is higher. Is she​ correct? Justify your response.

Answer 1

For Monica : Principle = $300 rate : 3.4% time 1 yr

Simple interest = Prt/100 = 300*3.4*1/100 = 1020/100= $ 10.2

For Paul : Principle = $400 rate : 2.8% time 1 yr

Simple interest = Prt/100 = 400*2.8*1/100 = 1120/100= $ 11.2

Explanation: