Tommy earned $14.80 in interest after 4 years on a principal of $100. His simple interest rate is 3.7%. Jane earned $61.50 in interest after 3 years on a principal of $500. Her simple interest rate is 4.1%. Which bank would you rather use, Tommy's or Jane's? Explain your reasoning.

Question

Tommy earned ​$14.80 in interest after 4 years on a principal of ​$100. His simple interest rate is 3.7​%. Jane earned ​$61.50 in interest after 3 years on a principal of ​$500. Her simple interest rate is 4.1​%. Which bank would you rather​ use, Tommy's or​ Jane's? Explain your reasoning.

GPT 3.5 · Answer

I would rather use Jane's bank. Although Tommy's simple interest rate is lower at 3.7%, he only earned $14.80 in interest on a principal of $100 after 4 years. On the other hand, Jane earned $61.50 in interest on a principal of $500 after 3 years with a higher simple interest rate of 4.1%. This indicates that Jane's bank offers better returns on the same principal amount over a shorter period of time compared to Tommy's bank. Therefore, I would choose Jane's bank for higher returns on my investment.