Question

When signing the lease for her new apartment, tanya paid a security deposit that earned 4% simple annual interest. at the end of a year, the interest earned on the security deposit was $17.50. how much was the security deposit?

Answer 1

.04(x) = 17.50
x = 17.50/.04
x = $437.50

Answer 2

$437.50

Explanation:

Let P represent the security deposit.

We have been given that when signing the lease for her new apartment, Tanya paid a security deposit that earned 4% simple annual interest. at the end of a year, the interest earned on the security deposit was $17.50.

`I=Prt`, where,

I = Amount of interest,

P = Principal,

r = Annual interest rate in decimal form,

t = Time in years.

`r=4\%=(4)/(100)=0.04`

`\$17.50=P*0.04*1`

`\$17.50=P*0.04`

`(\$17.50)/(0.04)=(P*0.04)/(0.04)`

`\$437.50=P`

Therefore, the security deposit was $437.50.