Bill has a savings account in Sierra Bank and earns interest at 2 1/4%. He is considering moving his business to Coulee Bank to earn 2 11/20% in interest. How much more is the interest rate at Coulee Bank than at Sierra Bank?
Choices:
5/8%
3/10%
1/5%
Not here
Use equivalent decimals and subtract.
To find out how much more the interest rate is at Coulee Bank than at Sierra Bank, we'll need to subtract the interest rate at Sierra Bank from the interest rate at Coulee Bank.
First, let's convert the interest rates to fractions:
Sierra Bank interest rate: 2 1/4% = 2.25% = 2.25/100 = 9/400
Coulee Bank interest rate: 2 11/20% = 2.55% = 2.55/100 = 51/2000
Now, subtract the interest rate at Sierra Bank from the interest rate at Coulee Bank:
Coulee Bank interest rate - Sierra Bank interest rate = 51/2000 - 9/400
To subtract fractions, we need to have a common denominator. The least common multiple (LCM) of 2000 and 400 is 2000. So, we'll convert the fractions to have 2000 as the denominator:
(51/2000) - (9/400) = (51*10/2000*10) - (9*5/400*5) = (510/20000) - (45/2000)
Now that both fractions have the same denominator, we can subtract them:
(510/20000) - (45/2000) = (510 - 45)/20000 = 465/20000
So, the interest rate at Coulee Bank is 465/20000 more than the interest rate at Sierra Bank.
To simplify the fraction, we can divide both the numerator and denominator by their greatest common divisor (GCD). The GCD of 465 and 20000 is 5, so:
(465/20000) ÷ 5 = 93/4000
Therefore, the interest rate at Coulee Bank is 93/4000 more than the interest rate at Sierra Bank.