Question

A bank manager wants to encourage new customers to open accounts with principals of at least $2,500. He decides to make a poster advertising a simple interest rate of 3%. What must the principal be if the bank manager also wants to advertise that one can earn $10 the first month? Can the poster correctly say, "Open an account of $2,500 and earn at least $10 interest in 1 month!"?

Answer 1

If the bank manager wants to advertise that one can earn $10 the first month, the principal must be $333.33

The poster is correct because when you open an account of $2500, you will be able to earn more than $10.

Step-by-step explanation:

The interest at the end of the first month can be calculated as the principal times the interest rate, so if a person opens an account of at least $2500 at a simple interest rate of 3%, this person will earn $75 because

$2500 x 3% = 2500 x 0.03 = $75

So, the poster is correct because a person will earn more than $10 at the end of the month.

On the other hand, if you want to win exactly $10, we can calculate the principal as

$10/0.03 = $333.33

Therefore, the answers are:

If the bank manager wants to advertise that one can earn $10 the first month, the principal must be $333.33

The poster is correct because when you open an account of $2500, you will be able to earn more than $10.