Ian invests $13,670 in a savings account at his local bank which gives 1.9% simple annual interest. He also invests $6,040 in an online savings account which gives 4.5% simple annual interest. After nine years, which one will have earned more interest, and how much more interest will it have earned, to the nearest dollar?
Answer
A
The local account will have earned $7,521 more interest.
B
The local account will have earned $3,199 more interest.
C
The online account will have earned $3,090 more interest.
D
The online account will have earned $109 more interest.
Explanation
Use simple interest, I = principal × annual rate × time. The local account earns $13,670 × 0.019 × 9 = $2,337.57, while the online account earns $6,040 × 0.045 × 9 = $2,446.20. The online account earns $2,446.20 − $2,337.57 = $108.63 more, which rounds to $109. So the online account will have earned $109 more interest.
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