Question

Mia has $1,000 in savings and wants to deposit her money in the savings account that will pay the most annual

interest. She is choosing between two accounts: Account A pays 5 percent and Account B pays 4 percent. Which
account will pay more interest? How much more will it pay each year?

Answer 1

Answer: Account A pays more interest. It pays $10 more.

Explanation:

The following information can be derived from the question:

Principal= $1000

Account A rate= 5%

Time = 1 year

Interest= (Principal × Rate × Time)/100

= ($1000 × 5 × 1)/100

= $5000/100

= $50

Account A pays interest of $50

Principal= $1000

Account B rate= 4%

Time = 1 year

Interest= (Principal × Rate × Time)/100

= ($1000 × 4× 1)/100

= $4000/100

= $40

Account B pays interest of $40

From the solutions provided, Account A pays more interest. This is calculated as: $50 - $40 = $10