Question

You deposited money in your bank for 8 years and didn't make any withdrawals. You earned $1,600. The interest rate was 8%. Calculate the initial amount deposited

Answer 1

$2500

Explanation:

This is a simple interest problem. The formula is I = Prt, where I is the interest earned, P is the initial investment, r is the interest rate as a decimal, and t is the time in years. Filling in:

1600 = P(.08)(8) and

1600 = .64P so

2500 = P