Question

You earned 1008 in interest by keeping your money in the bank for 7 years at a rate of 4.5.What was your initial deposit?

Answer 1

The principal required to accumulate interest of $ 1,008.00 on a rate of 4.5% per year for 7 years is $ 3200.

Explanation:

Given:

Interest I = $ 1008

Time period t = 7 years

Rate of Interest per year r = 4.5% = 4.5/100 = 0.045

To determine:

Initial deposit P = ?

Using the simple interest formula

I = Prt

P = I / rt

P = 1008 / ( 0.045 × 7 )

P = $ 3200

Therefore, the principal required to accumulate interest of $ 1,008.00 on a rate of 4.5% per year for 7 years is $ 3200.