Simple interest word problems refer to applications in which money is invested i

Question

Simple interest word problems refer to applications in which money is invested in an account paying simple interest rather than compounded. The relationship between principal (P), interest rate (r), length of time the money is invested (t), and earned interest (I) is given by the following formula: I = Prt
Mr. Simone deposits $8000 in one simple interest account and $2000 in a second simple interest account. The interest rate on the $8000 account is 2% more than the rate on the $2000 account. If the total yearly amount of interest on the two accounts is $578, find the interest rate on each account. Simple interest word problems refer to applications in which money is invested in an account paying simple interest rather than compounded. The relationship between principal (P), interest rate (r), length of time the money is invested (t), and earned interest (I) is given by the following formula: I = Prt
Mr. Simone deposits $8000 in one simple interest account and $2000 in a second simple interest account. The interest rate on the $8000 account is 2% more than the rate on the $2000 account. If the total yearly amount of interest on the two accounts is $578, find the interest rate on each account. Simple interest word problems refer to applications in which money is invested in an account paying simple interest rather than compounded. The relationship between principal (P), interest rate (r), length of time the money is invested (t), and earned interest (I) is given by the following formula: I = Prt
Mr. Simone deposits $8000 in one simple interest account and $2000 in a second simple interest account. The interest rate on the $8000 account is 2% more than the rate on the $2000 account. If the total yearly amount of interest on the two accounts is $578, find the interest rate on each account.

Explanation / Answer

Let the rate on $2000 account = x, then rate on $8000 account = x + 2

t = 1 year

Total SI = SI ($8000) + SI ($2000)

578 = [8000 * (x + 2) * 1]/100 + [2000 * (x) * 1]/100 (we divide by 100 as rates are expressed as %)

Solving 57800 = 8000x + 16000 + 2000x

10000x = 57800 - 16000 = 41800

Therefore x = 4.18%, which is the rate for the $2000 account.

and x + 2 = 6.18%, which is the rate for the $8000 account.

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