Step-by-step explanation:
1. Formula for simple interest,
[tex]a = p(1 + rt)[/tex]
where
a = Final amount
p = Principal amount
r = annual interest rate
t = time in years
given p = 1250
r = 4.25/100 (r is a raw number, not percentage, so we need to divide 100 here to get the raw number)
t=4
Substitute values into formula to get a.
[tex]a = 1250(1 + (\frac{4.25}{100})(4)) \\ = 1250(1 + 0.17) \\ = 1250(1.17) \\ = 1462.50dollars[/tex]
Let's use the simple interest to calculate Henry's final amount first.
p = 5000
r = 4.2/100
t = 4
[tex]a = 5000(1 + ( \frac{4.2}{100} )(4)) \\ = 5000(1 + 0.168) \\ = 5000(1 .168) \\ = 5840 \: dollars[/tex]
To calculate the interest paid, just use the final amount minus the principal amount
[tex]a - p = 5840 - 5000 \\ = 840dollars[/tex]
Now we will do the exact same method for Ingrid.
p = 5,000
r = 3.9/100
t = 6
[tex]a = 5000(1 + ( \frac{3.9}{100} )(6)) \\ = 5000(1 + 0.234) \\ = 5000(1.234) \\ = 6170 \: dollars[/tex]
[tex]a - p = 6170 - 5000 \\ = 1170dollars[/tex]
Difference in interest between 2 of them =
Interest of Ingrid Loan - Interest of Henry Loan
= 1170 - 840
= $330
