Ank pays 5% simple interest on money deposited

In summary, the conversation discusses interest rates and bonuses offered by a bank and credit union. It includes equations to model the money earned as a function of the amount invested at each institution, and poses questions about determining the amount needed to be invested for higher earnings.
  • #1
Erin_Sharpe
17
0
I don't know where to begin with this question... could some give me a few pointers? I'd appreciate it.

Bank pays 5% simple interest on money deposited, the credit union pays 4% with an added bonus of 25$ if the money stays in the account for a year:

1) if x represents the amt of $ deposited and y represents $ earned in year, write equations to model the money earned as a function of the amount invested at the bank and at the credit union (using above information)

2) determine how much $ must be invested before an employee would earn more moeny with the bank than he would with the credit union.

3) IF the credit union incresed the bonus to $30 how much money must be invested before an employee would earn more money with bank than he would with the credit union.

I'm not asking for the answers... I'm just asking for a point in the right direction, or just some explanation.

Thanks a bunch,
Erin :smile:
 
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  • #2
Erin_Sharpe said:
I don't know where to begin with this question... could some give me a few pointers? I'd appreciate it.

Bank pays 5% simple interest on money deposited, the credit union pays 4% with an added bonus of 25$ if the money stays in the account for a year:

1) if x represents the amt of $ deposited and y represents $ earned in year, write equations to model the money earned as a function of the amount invested at the bank and at the credit union (using above information)
For the bank, y= 0.05x. For the credit union, y= 0.04x+ 25.

2) determine how much $ must be invested before an employee would earn more moeny with the bank than he would with the credit union.
For what x is y= 0.05x= 0.04x+ 25?

3) IF the credit union incresed the bonus to $30 how much money must be invested before an employee would earn more money with bank than he would with the credit union.
Just replace the 25 with 30 are redo 1 and 2.

I'm not asking for the answers... I'm just asking for a point in the right direction, or just some explanation.

Thanks a bunch,
Erin :smile:[/QUOTE]
 
  • #3


Hi Erin,

I can definitely help you with this question. Let's break it down step by step:

1) To begin, we need to understand what simple interest is. Simple interest is calculated by multiplying the principal amount (the amount of money deposited) by the interest rate and the time period. In this case, the interest rate is 5% and the time period is 1 year.

So, for the bank, the equation to model the money earned would be: y = 0.05x

For the credit union, the equation would be: y = 0.04x + 25 (since there is an added bonus of $25 if the money stays in the account for a year)

2) To determine how much money must be invested before an employee would earn more money with the bank than with the credit union, we can set the two equations equal to each other and solve for x.

0.05x = 0.04x + 25
0.01x = 25
x = $2500

Therefore, if the employee invests more than $2500, they will earn more money with the bank than with the credit union.

3) If the credit union increases the bonus to $30, the equation would now be: y = 0.04x + 30. To determine how much money must be invested before an employee would earn more money with the bank than with the credit union, we can follow the same steps as before.

0.05x = 0.04x + 30
0.01x = 30
x = $3000

So, if the employee invests more than $3000, they will earn more money with the bank than with the credit union.

I hope this helps guide you in the right direction. Let me know if you have any other questions or need further clarification. Good luck!
 

1. What is simple interest?

Simple interest is a method of calculating interest on a principal amount, where the interest is only applied to the original amount and not to any accumulated interest. In other words, the interest does not compound over time.

2. How is simple interest calculated?

Simple interest is calculated by multiplying the principal amount by the interest rate and by the time period in years. The formula for simple interest is: Interest = (Principal amount) x (Interest rate) x (Time in years).

3. How much interest will I earn with Ank's 5% simple interest?

If you deposit $100 into Ank's account, you will earn $5 in interest after one year. The interest earned will remain the same every year as long as the principal amount and interest rate remain the same.

4. How often is the interest paid out?

The interest is paid out annually. This means that after one year, the interest earned will be added to the principal amount and earn interest for the following year.

5. Are there any additional fees or charges for depositing money with Ank?

No, Ank's account does not have any additional fees or charges for depositing money. However, there may be fees for withdrawal or for maintaining a minimum balance, so it is important to read the terms and conditions carefully.

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