In 5 years, a bank account with a 4.5% annual interest rate earned $3,375 as simple interest. What was the principal amount of the account.

Question

asked Feb 5, 2019 181k views

2 Answers

Hubert Schumacher · Answer 1 · 2019-02-09T10:50:20+0000

Answer: $15000

Explanation:

The formula to calculate the simple interest is given by :-

, where P is the principal amount , r is the rate of interest and t is the time period.

Given: Interest amount = $3,375

Rate of interest = 4.5%=0.045

Time period = 5 years

Let P be the principal amount, then we have

$3375=P* 0.045* 5\\\\\Rightarrow\ P=(3375)/(0.045* 5)=15000$

Hence, the principal amount of the account was $15000.