Question

You have 2 different savings accounts. For Account​ A, the simple interest earned after 9 months is ​$6.94. For Account​ B, the simple interest earned after 18 months is ​$13.80. If the interest rate is 3.7​% for Account A and 2.3​% for Account​ B, how much is the principal in each​ account? Which account earned you the most interest the first​ month? Explain your answer.

Answer 1

Answer:

Step-by-step explanation:

The formula for simple interest is expressed as

I = PRT/100

Where

P represents the principal or initial amount of money invested.

R represents interest rate

T represents time

Considering the investment on account A,

I = $6.94

R = 3.7%

T = 9 months = 9/12 = 0.75 years

6.94 = (P × 3.7 × 0.75)/100 = 0.02775P

P = 6.94/0.02775 = $250

Considering the investment on account B,

I = $13.80

R = 2.3%

T = 18 months = 18/12 = 1.5 years

13.8 = (P × 2.3 × 1.5)/100 = 0.0345P

P = 13.8/0.0345 = $400

To determine the account that earned more interest in the first month,

250/9 = $27.8

400/18 = $22.2

Account A earned you the most interest the first​ month because $27.8 is higher than $22.2