Question

note: please make sure to properly format your answers. all dollar figures in the answers need to include the dollar sign and any amount over 1,000 should include the comma ($2,354.67). all percentage values in the answers need to include a percentage sign (%). for all items without specific rounding instructions, round your answers two decimal places, show both decimal places (5.06). assume $20,000 is deposited into a savings account. bedford bank offers an annual rate of 1% simple interest for five years. slick bank offers a rate of 5.1% simple interest for one year. which earns more interest? select select bedford bank slick bank

Explanation:

Step1: Calculate interest from Bedford Bank

The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate, and $t$ is the time in years. Here, $P=\$20000$, $r = 0.01$, and $t = 5$. So, $I_{Bedford}=20000\times0.01\times5=\$1000$.

Step2: Calculate interest from Slick Bank

Using the same formula $I = Prt$, with $P = 20000$, $r=0.051$, and $t = 1$. So, $I_{Slick}=20000\times0.051\times1=\$1020$.

Step3: Compare the two interests

Since $1020>1000$, Slick Bank earns more interest.

Answer:

Slick Bank