Question

ian invests $13,670 in a savings account at his local bank which gives 1.9% simple annual interest. he also invests $6,040 in an online savings account which gives 4.5% simple annual interest. after nine years, which one will have earned more interest, and how much more interest will it have earned, to the nearest dollar? a. the local account will have earned $7,521 more interest. b. the local account will have earned $3,199 more interest. c. the online account will have earned $3,090 more interest. d. the online account will have earned $109 more interest. please select the best answer from the choices provided a b c d

Explanation:

Step1: Recall simple interest formula

The formula for simple interest is $I = P \times r \times t$, where $I$ is the interest, $P$ is the principal amount, $r$ is the annual interest rate (in decimal), and $t$ is the time in years.

Step2: Calculate interest for local account

For the local bank: $P = 13670$, $r = 0.019$, $t = 9$.
So, $I_{local}=13670\times0.019\times9$.
First, calculate $13670\times0.019 = 259.73$.
Then, $259.73\times9 = 2337.57$.

Step3: Calculate interest for online account

For the online bank: $P = 6040$, $r = 0.045$, $t = 9$.
So, $I_{online}=6040\times0.045\times9$.
First, calculate $6040\times0.045 = 271.8$.
Then, $271.8\times9 = 2446.2$.

Step4: Find the difference in interest

Subtract the interest of the local account from the online account: $2446.2 - 2337.57 = 108.63\approx109$.
So the online account earns about $109$ more interest.

Answer:

d. The online account will have earned $109$ more interest.