If you place $2,000.00 in a savings account with an interest rate of 4.5%/month versus an account with a rate of 3.75%/month, how much more interest could you earn in that month using the first account?

Question

(1 point)
Responses

$2.50 more
$2.50 more

$25.00 more
$25.00 more

$15.00 more
$15.00 more

$150.00 more

Answer 1

To calculate how much more interest you could earn by placing $2,000 in the account with a 4.5% interest rate compared to the account with a 3.75% interest rate, we will first calculate the interest earned from both accounts for that month.

1. Interest from the first account (4.5%): \[ \text{Interest} = \text{Principal} \times \text{Rate} = 2000 \times 0.045 = 90 \]

2. Interest from the second account (3.75%): \[ \text{Interest} = \text{Principal} \times \text{Rate} = 2000 \times 0.0375 = 75 \]

3. Difference in interest: \[ \text{Difference} = 90 - 75 = 15 \]

So, by placing $2,000 in the account with a 4.5% interest rate, you earn $15.00 more interest than you would with the 3.75% account.

The correct answer is $15.00 more.