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Solve the following word problems. Show your solution.

How much interest would you earn after 39 months if you deposited Php 15,500.00 in a bank that pays 0.75% simple interest? How much will your money be in the bank?
You deposited Php 30,000.00 in a bank that pays 5% interest rate per annum. How many years will it take for your money to earn half of the principal deposit?

User Atbebtg
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1 Answer

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Final answer:

The interest earned after 39 months is Php 360.75, and the total amount in the bank will be Php 15,860.75. It will take 10 years for the money to earn half of the principal deposit.

Step-by-step explanation:

To calculate the interest earned after 39 months, we can use the simple interest formula: Interest = (Principal) x (Rate) x (Time).

Given that the deposit is Php 15,500.00 and the interest rate is 0.75%, we can substitute these values into the formula: Interest = (15500) x (0.0075) x (39) = Php 360.75.

To calculate how much money will be in the bank after 39 months, we can simply add the interest to the principal deposit: Total amount = Principal + Interest = 15500 + 360.75 = Php 15,860.75.

For the second question, to find out how many years it will take for the money to earn half of the principal deposit, we can use the simple interest formula again: Interest = (Principal) x (Rate) x (Time).

Given that the deposit is Php 30,000.00 and the interest rate is 5%, we can substitute these values into the formula: Interest = (30000) x (0.05) x (Time). Since we want to find the time, we divide both sides of the equation by (30000) x (0.05) to isolate Time. This gives us: Time = Interest / [(Principal) x (Rate)] = (15000) / (30000 x 0.05) = 10 years.

User Clfaster
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