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

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* i* T`

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

`812.50=P+P* (1.25* (1)/(100))* 20yr=P* 1.25\\P=650\$`

∴ Samson had $650 when he opened the account.