Question

Mary Seitz invested a certain amount of money in a savings account paying 5% simple interest per year. When she withdrew her money at the end of 3 years, she received $300 in interest. How much money did Mary place in the savings account?

Mary Seitz invested $ blank in the savings account.

Answer 1

Mary Seitz invested $ 2,000 in the savings account.

Explanation:

1. Let's review the information given to us to answer the question correctly:

Interest rate = 5% simple = 0.05

Time of the investment = 3 years

Amount of interest = $ 300

2. How much money did Mary place in the savings account?

Let's recall the formula of the simple interest:

A = P * (1 + rt), where:

A = Final value of the investment

P = Initial investment

r = Interest rate

t = Time

Replacing with the values we know:

A = P * (1 + 0.05 * 3)

A = P * (1 + 0.15)

P + 300 = 1.15P (A = P + 300)

P - 1.15P = -300

-0.15P = -300

P = -300/-0.15

P = 2,000

Mary Seitz invested $ 2,000 in the savings account.