Question

Bert is planning to open a savings account that earns 1.6% simple interest yearly. He wants to earn exactly $240 in interest after 3 years. How much money should he deposit?

Answer 1

Answer: he should deposit $5000

Step-by-step explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the amount deposited.

P represents the principal or amount deposited.

R represents interest rate

T represents the duration of the deposit in years.

From the information given,

I = $240

R = 1.6%

T = 3 years

Therefore,

240 = (P × 1.6 × 3)/100

Multiplying both sides by 100, it becomes

240 × 100 = 4.8P

24000 = 4.8P

P = 24000/4.8

P = $5000

Answer 2

Answer:

$5,000.00

Step-by-step explanation:

To solve this, let's employ the formula for simple interest and then solve for the Principal (That is, the amount invested )

Simple Interest (I) = P*R*T / 100

Where P = Principal (Amount invested)

I = Interest = $240

R = Rate = 1.6%

T = Time = 3 years

Therefore:

P = ( 100 * I ) / T * R

P = (100 * $ 240) / 3 * 1.6

P = $24000 / 4.8

P = $5,000

It means that, he would deposit $5,000

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