Question

Bernadette and Julio both opened bank accounts with a deposit of $450.

Bernadette gets 4.5% simple interest per year. Julio gets 3.25% simple interest per year. Neither of them make any additional deposits or withdrawals.
After 10 years how much more interest did Bernadette receive

Answer 1

After 10 years Bernadette receive will $56.25 of more interested amount in compare with Julio interested amount.

Explanation:

The given is,

Bernadette and Julio deposit of $450

Bernadette gets 4.5% simple interest per year

Julio gets 3.25% simple interest per year

Step:1

Formula for calculate the future amount with simple interest,

`F = P(1+iN)`.......................................(1)

Where, F - Future amount

P - Initial deposit

i - Rate of interest

N - No. of years

For Bernadette,

P = $450

i = 4.5%

N = 10 years

Equation (1) becomes,

`F = 450(1+(0.045)(10))`

`= 450 (1+0.45)`

`=450 (1.45)`

F = $652.5

Interested amount = F - P

= ( 652.5 - 450 )

= $202.5

For Julio,

P = $450

i = 3.25%

N = 10 years

Equation (1) becomes,

`F = 450(1+(0.0325)(10))`

`= 450 (1+0.325)`

`=450 (1.325)`

F = $596.25

Interested amount = F - P

= ( 596.25 - 450 )

= $146.25

Step:2

Difference of interested amount for Bernadette and Julio,

= 202.5 - 146.25

= $56.25

Result:

After 10 years Bernadette receive $56.25 of more interest in compare with Julio interest.