Question

Leona opens Savings Account A, which pays 2.9% simple interest per year. She also opens Savings Account B with twice as much money. It pays 3.85% simple interest per year. If she makes $254.40 in interest in the first year, how much money did she put in each account?

Answer 1

@matt101 I'm not sure how to go about solving this one, the second savings account makes things a little confusing.

Answer 2

The general formula for simple interest is:

\[A=P(1+rt)\]
Where A is your accrued amount (the total after interest has been added), P is your principal (your starting amount), r is your interest rate (as a decimal), and t is time over which the interest occurs.

In this case it's a bit trickier because you need to worry about two separate simple interest situations to give you the total made:

\[A_{total}=A_1+A_2\]
The question also tells you that the principal of the second account is TWICE the principal of the first. In other words, P(2)=2P(1). Using this information and the above equation, you should be able to figure out the answer!

Answer 3

Ah... how about this... 254.4=.029(x) + 0.0385(2x) will that do it?

Answer 4

Yes it will actually!

My equations take into account the TOTAL earned, the principal PLUS the interest. Your equation is simpler and looks only at the interest earned. Either method will give you the same answer - just solve for x!

Answer 5

Thanks, so Leona would have put $2,400 in account A and 4,800 in account B... I'm not sure why she would go and do a thing like that but okay.

Answer 6

Yup, looks good!

And for all we know, Leona could know something we don't :P