Question

Two brothers, Mark and Charles, each inherit $30000. Mark invests his inheritance in a savings account with an annual return of 3.1%. While Charles invests his inheritance in a CD paying 5.8% annual. How much more that Mark does Charles have after 1 year

Answer 1

Solution: Mark's initial amount $=30000$

Mark invest's his inheritance amount in savings account with an annual interest of 3.1%. Therefore, the Mark's interest amount after 1 year is:

$Interest = Principal-amount \times rate\times time$

$Interest= 30000 \times 0.031 \times 1$

                  $=930$

Therefore, total amount Mark will have after 1 year $30000+930$=$30930

Now Charles also has $30000 from his inheritance.

Charles invests his inheritance in a CD paying 5.8% annual.

Therefore, interest amount for Charles after 1 year is:

$Interest = Principal-amount \times rate\times time$

$Interest= 30000 \times 0.058 \times 1$

                  $=1740$

Therefore, total amount Charles will have after 1 year $30000+1740$=$31740

Therefore, Charles will have $31740 - $30930 = $810 more than Mark