Question

Rich deposited money into a bank account that earned 2.5% simple interest each year. After 2 years, he had earned $14.65 in interest on the account. If no other money was deposited into or withdrawn from the account, how much was his initial deposit?

Answer 1

the answer is 293

Explanation:

Answer 2

The formula for simple interest is

`I=Prt`
where I=interest earned, P=initial deposit, r=rate of increase, and t=time.

We have

`I=14.65`

`r=2.5\%=0.025`

`t=2`

Plug in:

`14.65=P(0.025)(2)`
Solve for
`P`:

`14.65=0.05P`

`\rightarrow P=293`

So the initial deposit was $293.