Question

what was the original principal for an 8% simple interest bank account that holds $4340 after 3 years?

Answer 1

The principal amount is
`\$3500`

SOLUTION:

Given that, simple interest
`8\%`;
`\$4340` after 3 years

We have to find the principal.

Now, let the principal amount be p.

Then,
`\text { Simple Interest }=(p * 8 * 3)/(100)=(p * 24)/(100)`

Now, we know that, Balance = Principal amount + Simple Interest

`\begin{array}{l}{\rightarrow \$ 4340=p+(24 p)/(100)} \\\\ {\rightarrow 4340=p\left(1+(24)/(100)\right)} \\\\ {\rightarrow 4340=p * (100+124)/(100)} \\\\ {\rightarrow p=4340 * (100)/(124)} \\\\ {\rightarrow p=35 * 100} \\\\ {\rightarrow p=3500}\end{array}`