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Tommy earned $76.00 in interest after 5 years on a principal of $400. Jane earned $82.00 in interest after 2 years on a principal of $1,000. Which bank would you rather use, Tommy's or Jane's? Why?

Respuesta :

SociometricStar

Answer:

The bank in which Jane has invested.

Step-by-step explanation:

For Tommy's Bank:

P = $400

t = 5 years

I = $76

Simple interest formula is given by

[tex]I=Prt\\\\76=400(r)5\\\\r=0.038\\\\r=3.8\%[/tex]

For Jane's Bank:

P = $1000

t = 2 years

I = $82

Simple interest formula is given by

[tex]I=Prt\\\\82=1000(r)2\\\\r=0.041\\\\r=4.1\%[/tex]

Since, Jane's bank has higher interest rate. It means one can get higher interest if invest in this bank.

Therefore, we should prefer the bank in which Jane has invested.


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