Question

Tony’s deposit earns SAR 45.80 in simple interest over 3 years in an account with an interest rate of 1.72%. How much did Tony deposit?

Answer 1

Answer:

The answer is 500

Step-by-step explanation:

STEP 1: Convert interest rate of 2% per 6 months into rate per year.

                             rate per year = rate per 6 months x 2 = 2% x 2 = 4%

STEP 2: Convert 9 months into years.

                             9 months = 9/12 years = 0.75 years

STEP 3: Find principal by using the formula I = P x i x 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 = $15, i = 4% and t = 0.75 years, so

                                                                   I = P x i x t

                                                                   P = I/i x t

                                                                   P = 15/0.04 x 0.75

                                                                   P = 500