Question

A sum of money is deposited in a bank which offers a simple interest rate of 0.325% per annum. At

Answer 1

Answer:

The sum of money deposited is approximately $22,021.74

Step-by-step explanation:

The given interest and amounts of the deposit are outlined as follows;

The simple interest per annum, R = 0.325%

The number of years the money is deposited, T = 4 years

The total amount received (Interest + Initial deposit), A = $50,650

We have;

I = P × R × T

Where;

P = The principal (initial amount deposited)

R = The (annual) interest rate = 0.325%

T = The time = 4 years

Therefore;

The total amount received, A = P + I

P + I = P + P × R × T = P × (1 + R × T)

∴ A = P + I = P × (1 + R × T)

P = A/(1 + R × T)

Plugging in the values, gives;

P = 50,650/(1 + 0.325 × 4) = 506,500/23 ≈ 22,021.74

The sum of money deposited, P = $22,021.74