Question

Dakota earned $12.50 in interest in Account A and $11.25 in interest in Account B after 15 months.

If the simple interest rate is 4% for Account A and 3% for Account B, which account has the greater
principal? Explain.

Answer 1

You haven't explained the time for account A - we will assume 12 months or the answer is obvious:

for Acct(A) : I = 12.5 = A1 * .04 A1 = $312.50

for Acct(B) I = 11.25 = A2 * .03 * 5/4 = 300

Note that annual interest in B is .03 or I = .03 + .03 * 1/4 = .0375 for 15 mos.

11.25 = .0375 * A2 A2 = 300

Account A will have the greater principal