Question

3. If the interest rate at the bank for a savings account is 0.03%, how much money would you need to leave in the account for one year in order to earn $10 in interest?

Answer 1

The amount of interest that is incurred by depositing a certain amount is calculated through the equation,
I = P x r
where I is the interest, P is the principal, and r is the decimal equivalent of the given rate. Substituting the known values,
10 = P x (0.03/100)
The value of P from the equation is 33,333.33. Thus, an amount of $33,333.33 should be deposit to earn $10.