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27 March, 21:59

Michelle wants to borrow $4,500. bank a will lend michelle the money at a simple annual interest rate of 9% for 6 years. bank b will lend her the money at 11% for 4 years. which bank would charge michelle the least amount of interest? explain.

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  1. 27 March, 23:52
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    Bank A:

    A = 4500 (1 + (0.09 * 6)) = 6930

    A = $ 6,930.00

    The total amount accrued, principal plus interest,

    from simple interest on a principal of $ 4,500.00

    at a rate of 9% per year.

    for 6 years is $ 6,930.00.

    Bank B:

    A = 4500 (1 + (0.11 * 4)) = 6480

    A = $ 6,480.00

    The total amount accrued, principal plus interest,

    from simple interest on a principal of $ 4,500.00

    at a rate of 11% per year

    for 4 years is $ 6,480.00.

    So bank B would charge the least amount of interest.
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