You deposit some money into a bank account paying 8% simple interest per year. You received $500 in interest after 2 years. How much the deposit (principal) was?
Result
The principal was $3125.
Explanation
Find principal by using the formula I=P⋅i⋅t, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.
In this example I = $500, i = 8% and t = 2 years, so
