Question

Gia opened two savings accounts at two different banks. One account earns an annual 3.4% simple interest, and the other earns half as much. If she deposited $500 in each account, how much total interest will she have earned in 3 years? A. $76.50 B. $153.00 C. $765.00 D. $38.25

Answer 1

The correct option is;

A. $76.50

Explanation:

To solve the question, we note the formula for simple interest = Principal × Rate × Time/100

That is

`S.I. = (Principal * Rate * Time)/(100) = (P * R * T)/(100)`

Where:

P = Principal Amount = $500.00

R = Interest Rate = 3.4%

T = Time period = 3 Years

Therefore,

`S.I. = (500 * 3.4 * 3)/(100) = \$51`

For the second account, we have

P = Principal Amount = $500.00

R = Interest Rate = 3.4/2% = 1.7 %

T = Time period = 3 Years

Therefore,

`S.I. = (500 * 1.7 * 3)/(100) = \$25.5`

Therefore, the total interest she have earned in three years is $51 + $25.5 = $76.5