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10 February, 20:01

You have 2 different savings accounts. For Account A, the simple interest earned after 21 months is $13.65. For Account B, the simple interest earned after 30 months is $40.25. If the interest rate is 3.9 % for Account A and 2.3 % for Account B, how much is the principal in each account? Which account earned you the most interest the first month? Explain your answer.

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  1. 10 February, 23:59
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    Step-by-step explanation:

    The formula for simple interest is expressed as

    I = PRT/100

    Where

    P = principal

    T = time in years

    R = interest rate on the principal.

    For account A, the simple interest earned after 21 months is $13.65. The interest rate is 3.9 % for Account A

    Let y represent the principal for account B. Therefore

    P = x

    I = $13.65

    T = 21/12 = 1.75 years

    R = 3.9

    Therefore

    13.65 = (x * 3.9 * 1.75) / 100

    1365 = 6.825x

    x = 1365/6.825 = $200

    For account B, the simple interest earned after 30 months is $40.25. The interest rate is 2.3% for Account B

    Let x represent the principal for account A. Therefore

    P = y

    I = $40.25

    T = 30/12 = 2.5 years

    R = 2.3

    Therefore

    40.25 = (y * 2.3 * 2.5) / 100

    4025 = 5.75y

    y = 4025/5.75 = $700

    The principal for account A is $200

    The principal for account B is $700

    For account A, interest earned in the first month is

    13.65/21 = $0.65

    For account B, interest earned in the first month is

    40.25/30 = $1.34

    Account B earned the most interest in the first month (the same interest is earned every month)
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