Question

Matthew earned $75 in interest on

his savings account in one year.
The bank paid a simple interest
rate of 5%. What was the initial
amount of money Matthew put
into his savings account?​

Answer 1

Explanation:

The formula for simple interest is

I = Prt,

where I is the interest earned,

P is the initial investment amount,

r is the interest rate in decimal form, and

t is the time in years. For us,

I = 75,

P = ?

r = .05

t = 1

Filling in what we were given:

75 = P(.05)(1) and

.05P = 75 so

P = 1500