livvi invests $19,430 in a savings account at her local bank which pays 1.8% simple annual interest. she…

livvi invests $19,430 in a savings account at her local bank which pays 1.8% simple annual interest. she also deposits $16,470 in an online savings account which pays 2.7% simple annual interest. after six years, which account will yield more interest, and approximately how much more interest will it yield? a. the online account will give $2,668 more interest. b. the online account will give $570 more interest. c. the local account will give $2,960 more interest. d. the local account will give $2,390 more interest.

livvi invests $19,430 in a savings account at her local bank which pays 1.8% simple annual interest. she also deposits $16,470 in an online savings account which pays 2.7% simple annual interest. after six years, which account will yield more interest, and approximately how much more interest will it yield? a. the online account will give $2,668 more interest. b. the online account will give $570 more interest. c. the local account will give $2,960 more interest. d. the local account will give $2,390 more interest.

Answer

Explanation:

Step1: Calculate local - bank account interest

Use simple - interest formula $I = Prt$, where $P$ is principal, $r$ is annual interest rate (in decimal), and $t$ is time in years. For local bank, $P = 19430$, $r=0.018$, $t = 6$. So $I_{local}=19430\times0.018\times6=19430\times0.108 = 2098.44$.

Step2: Calculate online - bank account interest

For online bank, $P = 16470$, $r = 0.027$, $t = 6$. So $I_{online}=16470\times0.027\times6=16470\times0.162=2668.14$.

Step3: Find the difference in interest

$I_{difference}=I_{online}-I_{local}=2668.14 - 2098.44=569.7\approx570$.

Answer:

b. The online account will give $570 more interest.