Question

Darryl deposits $1,500 into a savings account that has a simple interest rate of 2.7%. Lori deposits $1,400 into a savings account that has a simple interest rate of 3.8%. If no other transactions are made, who will have more money in their account after 10 years? How much more?

Answer 1

Answer:

Lori will make $27.00 more.

Step-by-step explanation:

The formula to calculate simple interest is

A = P(1+rt)

P = Principal amount

r = rate of interest ( in decimal )

t = time

First we calculate Darryl's deposit, so put the values in the formula

A = 1,500(1 + 0.027×10)

A = 1,500 ( 1+0.27 )

A = 1,500 × 1.27

A = $1905

Now we will calculate Lori's deposit

A = 1,400 ( 1 + 0.038 × 10 )

A = 1,400 ( 1 + 0.38 )

A = 1,400 × 1.38

A = $1,932

Lori will make money after 10 years = $1,932

Darryl will make money after 10 years = $1905

so Lori will make more than Darryl, the difference will be = 1,932 - 1,905 = $27

After 10 years Lori will have make $27.00 more in their account.

Answer 2

Darryl:
Answer:
A = $1,905.00

(I = A - P = $405.00)

Equation:
A = P(1 + rt)

Lori:

Answer:
A = $1,932.00

(I = A - P = $532.00)

Equation:
A = P(1 + rt)

Thus $532-$405= $127 more in Lori's account