Question

On the 1st Jan 2012 Beth invested some money into a bank account.

The account pays 2.5% interest per year.
On the 1st Jan 2013 she withdraws £1000.
On the 1st Jan 2014 she had £17,466 in the account.

How much money did Beth originally invest into the account.


Please show your method.

Answer 1

Account on 2014 is £17,466 when multipliled by 0.025 (interest per year) it will result to £436.65. So the money she had excluding the interest of the said year is £17,029.35 (17,466 - 436.65).
Going back to 2013, she withdraws £1000. If she has £17,029.35 in 2014, we can add £1000 to get £18, 029.35.If we take 2.5% from £18, 029.35. (18,029.35. x 0.025) the result is £450.73. Excluding the interest of year 2013, the money amounts to £17,578.62 (18,029.35 - 450.73), which is the original invested amount on her bank account from year 2012.