Question

Gino and Milla each open a savings account with an initial deposit of $6,300. Gino's account pays 2% simple interest annually. Milla's account pays 3% simple interest annually. If Gino and Milla make no other deposits or withdrawals, how much more interest will Milla's account earn than Gino's after 1 year?

Answer 1

Milla's account would earn $63 more that Gino's account after 1 year.

Explanation:

Both Gino and Milla made an initial deposit of $6300.

Principal = $6300

Gino's rate = 2% = 0.02

Milla's rate = 3% = 0.03

number of years = 1

Interest = Principal x Rate x Time

So that,

for Gino;

Interest = 6300 x 0.02 x 1

= 126

The interest on Gino's savings after a year is $126.

for Milla;

Interest = 6300 x 0.03 x 1

= 189

The interest on Milla's savings after a year is $189.

Milla's interest - Gino's interest = 189 - 126

= 63

Milla's account would earn $63 more that Gino's account after 1 year.