You have 2 different savings accounts. For Account A, the simple interest earned after 21 months is $13.65. For Account B, the simple interest earned after 30 months is $40.25. If the interest rate is 3.9 % for Account A and 2.3 % for Account B, how much is the principal in each account? Which account earned you the most interest the first month? Explain your answer.

Step-by-step explanation:

The formula for simple interest is expressed as

I = PRT/100

Where

P = principal

T = time in years

R = interest rate on the principal.

For account A, the simple interest earned after 21 months is $13.65. The interest rate is 3.9 % for Account A

Let y represent the principal for account B. Therefore

P = x

I = $13.65

T = 21/12 = 1.75 years

R = 3.9

Therefore

13.65 = (x * 3.9 * 1.75) / 100

1365 = 6.825x

x = 1365/6.825 = $200

For account B, the simple interest earned after 30 months is $40.25. The interest rate is 2.3% for Account B

Let x represent the principal for account A. Therefore

P = y

I = $40.25

T = 30/12 = 2.5 years

R = 2.3

Therefore

40.25 = (y * 2.3 * 2.5) / 100

4025 = 5.75y

y = 4025/5.75 = $700

The principal for account A is $200

The principal for account B is $700

For account A, interest earned in the first month is

13.65/21 = $0.65

For account B, interest earned in the first month is

40.25/30 = $1.34

Account B earned the most interest in the first month (the same interest is earned every month)