Question

Mark invests $6,700 in an online savings account which gives 4.2% simple annual interest. He also invests $6,000 in a savings account at his local bank which gives 6.9% simple annual interest. After fifteen years how much more interest will it have earned, to the nearest dollar?

Answer 1

$4,221.00 for online and 6,210.00 for the instore

Explanation:

Calculation:

First, converting R percent to r a decimal

r = R/100 = 4.2%/100 = 0.042 per year.

Solving our equation:

A = 6700(1 + (0.042 × 15)) = 10921

A = $10,921.00

The total amount accrued, principal plus interest, from simple interest on a principal of $6,700.00 at a rate of 4.2% per year for 15 years is $10,921.00.

Calculation:

First, converting R percent to r a decimal

r = R/100 = 6.9%/100 = 0.069 per year.

Solving our equation:

A = 6000(1 + (0.069 × 15)) = 12210

A = $12,210.00

The total amount accrued, principal plus interest, from simple interest on a principal of $6,000.00 at a rate of 6.9% per year for 15 years is $12,210.00.