Sam invests $9,400 in a fund yielding 5.2% simple interest annually. At the same time, Pat shops around for a better interest rate and invests $9,400 in a fund yielding 6.0% simple interest annually. After seven years, how much more interest has Pat's fund earned than Sam's fund?

a.

$817.80

b.

$3,948.00

c.

$652.40

d.

$526.40

The accumulated interest of money with simple interest rate for n years may be calculated by:

I = Pin

where P is the principal and i is the interest rate.

For Sam's case the interest is,

I = ($9,400) x 0.052 x 7 = $3,421.6

For Pat's,

I = ($9,400) x 0.06 x 7 = $3,948

The difference between their interests (D),

D = $3,948 - $3,421.6 = $526.4

Thus, the answer is letter D. $526.4