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?
Accepted Solution
A:
Answer:Lori will make $27.00 more.Step-by-step explanation:The formula to calculate simple interest is A = P(1+rt)P = Principal amountr = rate of interest ( in decimal )t = timeFirst we calculate Darryl's deposit, so put the values in the formulaA = 1,500(1 + 0.027×10)A = 1,500 ( 1+0.27 )A = 1,500 × 1.27A = $1905Now we will calculate Lori's depositA = 1,400 ( 1 + 0.038 × 10 )A = 1,400 ( 1 + 0.38 )A = 1,400 × 1.38A = $1,932Lori will make money after 10 years = $1,932Darryl will make money after 10 years = $1905so Lori will make more than Darryl, the difference will be = 1,932 - 1,905 = $27After 10 years Lori will have make $27.00 more in their account.