3. A savings account has a 3% interest rate.

(a) Complete the ratio table shown. Show your work.

Deposit ($) 100 50 300

Interest ($) 12

(b) How much more interest would you have if you deposited $200 than if you deposited $150? Show your work.

Answer:

The interest, I, gained from the initial deposit, P, is calculated through the equation,

I = P x r x n

Since we are only dealing with a year, n = 1. For this item,

($200) : I = 200 x 0.03 = $6

($150) : I = 150 x 0.03 = $4.5

Subtracting the two values, the difference would be $1.5. Thus, you will gain $1.5 more if you deposit $200 rather than $150.