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Alexeev081 [22]
3 years ago
7

Two brothers, Michael and John, each inherit $11000. Michael invests his inheritance in a savings account with an annual return

of 3%, while John invests his inheritance in a CD paying 5.7% annually. How much more money than Michael does John have after 1 year?
Business
1 answer:
Solnce55 [7]3 years ago
4 0

Answer:

$297

Explanation:

We are to find the simple interest received by each of Michael and John after 1 year on $11000 at their respective rate of interest, then subtract the bigger from the smaller, the difference is the answer.

Simple Interest  = PxRxT

                      P  = Principal

                      R  = Rate

                      T  = Time      

Michael

                      P  =  $11,000

                      R  =  3%

                      T  =  1 Year

Simple Interest  =  $11000 x 3% x 1

                           =    $11000 x 0.03

                           =    $330

That is Michael will  receive an interest of $330 after 1 year

 

John

                          P  =  $11000

                          R  =  5.7%

                          T  =  1 Year  

   Simple Interest  =  $11000 x 5.7% x 1

                               =  $11000 x 0.057

                               =    $627

This means John will receive an interest of $627

Therefore, John will receive $627 - $330 = $297 more than Michael

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