Question

Mr. Drysdale earned $906.25 in interest in one year on money that he had deposited in his local bank. If the bank paid an interest rate of 6.25% APR, how much money did Mr. Drysdale deposit?

Answer 1

Interest rate: 6.25% ; Total amount of interest $906.25 .

Let x be the amount invested so that to get $906.25 as interest gain:

(x).(6.25%) = 906.25

x = 906.25/6.25% → x= 906.25/0.0625 and x = $14,500 (deposit amount)

Answer 2

$ 14500

Explanation:

Let P be the money invested initially,

Annual interest percentage, r = 6.25% = 0.0625,

Time, t = 1 year,

Thus, the interest would be,

`I= P* r* t`

Here, I = $ 906.25,

`906.25= 0.0625P`

`\implies P=\$ 14500`

Hence, $ 14500 was deposited.