AnswersKapuschinskyWCA 3424 Consumer Applications 1st nine weeks 26-27Simple InterestQuestion 56
56
QuizMultiple Choice

Simple Interest

Question 56 • (Kapuschinsky)WCA 3424 Consumer Applications 1st nine weeks 26-27

Sam invests $9,400 in a fund yielding 5.2% simple interest annually. At the same time, Pat shops around for a better interest rate and invests $9,400 in a fund yielding 6.0% simple interest annually. After seven years, how much more interest has Pat’s fund earned than Sam’s fund?

Answer
A
$817.80
B
$3,948.00
C
$652.40
D
$526.40

Explanation

The difference in annual interest rates is 6.0% − 5.2% = 0.8%, or 0.008. Over seven years, the extra simple interest is $9,400 × 0.008 × 7 = $526.40, so Pat’s fund earned $526.40 more.

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