Question

1. construct argument 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?

Explanation:

Step1: Calculate Tommy's annual interest rate

We use the simple interest formula \( I = Prt \), where \( I \) is interest, \( P \) is principal, \( r \) is rate, and \( t \) is time. Rearranging for \( r \), we get \( r=\frac{I}{Pt} \). For Tommy, \( I = 76 \), \( P = 400 \), \( t = 5 \). So \( r=\frac{76}{400\times5}=\frac{76}{2000}=0.038 = 3.8\% \).

Step2: Calculate Jane's annual interest rate

Using the same formula \( r=\frac{I}{Pt} \). For Jane, \( I = 82 \), \( P = 1000 \), \( t = 2 \). So \( r=\frac{82}{1000\times2}=\frac{82}{2000}=0.041 = 4.1\% \).

Step3: Compare the two rates

Jane's annual interest rate (4.1%) is higher than Tommy's (3.8%).

Answer:

I would rather use Jane's bank because Jane's bank has a higher annual interest rate (4.1% vs. Tommy's 3.8%), which means money will grow faster over time when deposited in Jane's bank.