simple interest word problem

Question

ou decide to invest some money in two different money market accounts. One account (account A) pays 3% interest. The other account (account B) pays only 2% interest but offers a $20 bonus for signing up for the account paid at the end of the two year period. Write an expression for each account to determine the amount of interest (and bonus) you would earn after two years. Use y to represent interest (and bonus) and x to represent the principle invested. Label each equation. Hint: This should be fairly simple if you know the formula for simple interest!

Answer 1

Simple Interest:  I = prt

Interest = principle(rate)(time)

 

Account A:  y = x(0.03)(2)

                 y = 0.06x

 

Total in Account A:

x + 0.06x = 1.06x

 

Account B:  y = x(.02)(2)

                 y = 0.04x

 

Total in Account B:

x + 0.04x + 20 = 1.04x + 20