Question

A bank manager wants to encourage new customers to open accounts with principals of at least ​$3,000 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 ​$10 the first​ month? Can the poster correctly​ say, 'Open an account of ​$ 3,000 and earn at least ​$ 10 interest in 1​ month!'?"

(a) Yes, the principal should be $3,333.33
(b) No, the principal should be higher than $3,333.33
(c) Yes, the principal can be exactly $3,000
(d) No, the principal cannot be exactly $3,000

Answer 1

The principal must be $333.33 if a person wants to earn at least $10 interest in 1 month. The poster cannot correctly say, 'Open an account of $3,000 and earn at least $10 interest in 1 month!'

Step-by-step explanation:

In order to find the principal, we can use the formula for simple interest:

Interest = Principal × Rate × Time

Given that the interest is $10, the rate is 3%, and the time is 1 month, we can substitute these values into the formula:

$10 = Principal × 0.03 × 1

Simplifying the equation, we get:

$10 = Principal × 0.03

Dividing both sides of the equation by 0.03, we can determine the principal:

Principal = $10 / 0.03 = $333.33

Therefore, the principal must be $333.33 in order for a person to earn at least $10 interest in 1 month. The poster cannot correctly say, 'Open an account of $3,000 and earn at least $10 interest in 1 month!'