A 5.
Interest of JIM : 1000 * (1.1)^2 - 1000 = 210
Interest of Laura : 2000 * (1.05)^2 - 2000 = 205
Difference is 5.
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10% blocks of hundreds, thousands, etc. are easy to calculate - just remove one zero from the end.
10% of $1000 equals $100. So after one year, Jim's account has $1100.
10% of $1100 equals $110. So after the second year, Jim's account has $1100+110 = 1210.
5% blocks are equally easy to calculate: they're half of a 10% block.
5% of $2000 is half of $200, or $100. So after one year, Laura's account has the same $2100.
5% of $2100 is half of $210, or $105. During this second year, Jim's account makes $110, so the difference between the accounts is 110-105 = $5. Answer is A.
10% of $1000 equals $100. So after one year, Jim's account has $1100.
10% of $1100 equals $110. So after the second year, Jim's account has $1100+110 = 1210.
5% blocks are equally easy to calculate: they're half of a 10% block.
5% of $2000 is half of $200, or $100. So after one year, Laura's account has the same $2100.
5% of $2100 is half of $210, or $105. During this second year, Jim's account makes $110, so the difference between the accounts is 110-105 = $5. Answer is A.
