Question

How much more will $28,000 earn in interest than $16,000 if both are
invested in savings accounts with APYs of 5.8% for a year?​

Answer 1

Answer:

Final answer is $12696.

Step-by-step explanation:

Given that initial amount P = $28000

Interest rate r = 5.8% = 0.058

Time = 1 year

Then future value is given by :

$A=P\left(1+r\right)^t$

$A=28000\left(1+0.058\right)^1=29624$

Similarly calculate future value for 2nd case:

Given that initial amount P = $16000

Interest rate r = 5.8% = 0.058

Time = 1 year

Then future value is given by :

$A=P\left(1+\frac{r}{n}\right)^{n\left(t\right)}$

$A=16000\left(1+0.058\right)^1=16928$

then difference = 29624 - 16928 = 12696

Hence final answer is $12696.

Answer 2

Answer:

$696.

Step-by-step explanation:

We are asked to find the amount of interest earned on $28,000 than $16,000 with APYs of 5.8% for a year.

We will use simple interest formula to solve our given problem.

$I=Prt$

$I$ = Amount of interest,

P = Principal amount,

r = Interest rate in decimal form,

t = Time in years.

$5.8\%=\frac{5.8}{100}=0.058$

Let us find difference of interests as:

$\ 28,000\times 0.058-\ 16,000\times 0.058$

$(\ 28,000-\ 16,000)\times 0.058$

$(\ 12,000)\times 0.058$

$\ 696$

Therefore, it will earn $696 more in interest.