The amount of simple interest accrued on a sum of money varies jointly with the amount of money, the interest rate, and the time the money is invested. A sum of money is invested at a simple interest rate of 4% for 3 years and accrues $168 in interest. The same sum of money is invested in a second account at a simple interest rate of 6% for 4 years. Which statement is true?
Answer
A
The amount of interest accrued on the second account is less than double the amount of interest accrued on the first account.
B
The amount of interest accrued on the second account is double the amount of interest accrued on the first account.
C
The amount of interest accrued on the second account is more than double but less than triple the interest accrued on the first account.
D
The amount of interest accrued on the second account is more than triple the interest accrued on the first account.
Explanation
For the same sum of money, simple interest varies with the interest rate multiplied by the time. The first account’s rate-time product is 0.04 × 3 = 0.12, while the second’s is 0.06 × 4 = 0.24, which is exactly twice as large. Therefore, the second account earns double the first account’s $168 interest, so the true statement is that its interest is double.
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