Question

Assigningoch Sing8628-12Question Help 0Monica deposits $100 into a savings account that pays a simple interest rate of 3.8%. Paul deposits$200 into a savings account that pays a simple interest rate of 2.7%. Monica says that she will earnmore interest in 1 year because her interest rate is higher. Is she correct? Justify your response.Monica will earn $) in 1 year while Paul will earn $(in 1 year.

Answer 1

we must use the formula for each person

the formula is

`C=c*(1+t)^n`

where C is the total, c the initial capital, t the interest and n the number of years

Monica

`\begin{gathered} C=100*(1+0.038)^1 \\ C=103.8 \end{gathered}`

the total earn of monica is $3.80

`103.8-100=3.8`

Paul

`\begin{gathered} C=200(1+0.027)^1 \\ C=205.4 \end{gathered}`

The total earn of Paul is $5.40

`205.4-200=5.4`

So, Monica will earn $3.80 in 1 year while Paul will earn $5.40 in 1 year.