Edwin deposited money into a savings account that pays a simple annual interestrate of 1.2%. He earned $27 in interest after 3 years. How much did he deposit?



Answer :

SOLUTION:

Step 1:

In this question, we are given the following:

Edwin deposited money into a savings account that pays a simple annual interest rate of 1.2%.

He earned $27 in interest after 3 years.

How much did he deposit?

Step 2:

The details of the solution are as follows:

[tex]\begin{gathered} Simple\text{ Interest = }\frac{Principa\text{l x Rate x Time}}{100} \\ Interest\text{ = \$ 27} \\ Time\text{ = 3 years} \\ Principal\text{ = P} \\ Rate\text{ = 1.2 \%} \end{gathered}[/tex]

Making P the subject of the formulae, we have that:

[tex]\begin{gathered} P\text{ =}\frac{100\text{ x Simple Interest}}{Rate\text{ X Time}} \\ P\text{ = }\frac{100\text{ x 27}}{1.\text{ 2 x 3}} \\ P\text{ = }\frac{2700}{3.6} \\ P=\text{ \$ 750} \end{gathered}[/tex]

CONCLUSION:

He deposited $ 750