Question

1. Ralin and Michael each opened a savings account with a deposit of $15,950.

· Ralin earn 5.5% simple interest per year.

· Michael earned 3% simple interest per year.

· Neither of them made additional deposits or withdrawals.

How much more did Ralin receive in interest than Michael after 18 months?


2. Mr. Smith borrowed $3000 to buy a used car. The simple interest rate is 12% per year. Mr. Smith paid off the loan in 48 months. How much did he pay for his car?


3. Athena and Jeremiah each opened a savings account with a deposit of $7,050.

· Athena earn 5.5% simple interest per year.

· Jeremiah earned 6% simple interest per year.

· Neither of them made additional deposits or withdrawals.

How much more did Jeremiah receive in interest than Athena after 8 years?


4.Ms. Brennan opened a savings account with a deposit of $950.

· She earned 3.65% simple interest per year.

· There was no additional deposits or withdrawals.

How much money does she have after 12 years?

Answer 1

Simple interest formula

• I = Prt, I- amount of interest, P- principal, r- interest rate, t - time
• A = P(1 + rt), A - final amount, the rest as above

#1

18 months = 1.5 years

The difference in the amount of interest:

• $15950*1.5*(5.5-3)/100 = $598.13

#2

• $3000*(1 + 4*12/100) = $4440

#3

• $7050*8*(6 - 5.5)/100 = $282

#4

• $950*(1 + 12*3.65/100) = $1366.10