Question

Samson opened a bank account with 1.25% simple interest. The total amount of interest Samson will earn after 20 years is $812.50. How much did Samson deposit when he opened the accoun

Answer 1

$650

Step-by-step explanation:

       The principal amount recieves a simple interest every year. The simple interest rate is given as $1.25\%$.

       It is given that the total amount after 20  years is $812.50

       $Total=Principal+Interest\textrm{ = }P+P\times i\times T$

Here $P$ is the principal amount, $i$ is the interest rate, $T$ is the time period.

       $812.50=P+P\times (1.25\times \frac{1}{100})\times 20yr=P\times 1.25\\P=650$

∴ Samson had $650 when he opened the account.