Amit investment $750 at 8.2% per year and $1,300 at 4.9% per year.Both investments earn simple intrest.Whoch investment earns more simple intrest in a year?
Show your work.
750 * 0.82 = ?
1,300 * 0.49 = ?
To determine which investment earns more simple interest in a year, we can calculate the interest earned by each investment separately.
Let's start with Amit's first investment of $750 at an interest rate of 8.2%. The formula for calculating simple interest is:
Simple Interest = Principal x Rate x Time
For this investment, we know the principal is $750, the rate is 8.2%, and the time is 1 year. Plugging in the values:
Simple Interest = 750 x 8.2% x 1
Now we need to convert the interest rate from a percentage to a decimal by dividing it by 100:
Simple Interest = 750 x (8.2/100) x 1
Simplifying the calculation:
Simple Interest = 61.5
So, Amit's first investment earns $61.50 in simple interest in a year.
Now let's move on to Amit's second investment of $1,300 at an interest rate of 4.9%. Using the same formula, we have:
Simple Interest = 1300 x 4.9% x 1
Converting the interest rate to a decimal:
Simple Interest = 1300 x (4.9/100) x 1
Simplifying the calculation:
Simple Interest = 63.67
Therefore, Amit's second investment earns $63.67 in simple interest in a year.
Comparing the two investments, we can conclude that Amit's second investment of $1,300 at 4.9% per year earns more simple interest in a year.