Step 1: Let's review the information given to us to answer the problem correctly:
• p = Principal
,
• 0.12 = Interest rate
,
• 224 = Future value
Step 2: Let's write a problem based on this information, using the Simple Interest Formula, as follows:
A = P(1 + rt), where:
A = Final amount
P = Principal
r = Annual interest rate
t = Time in years
224 = P (1 + 0.12t)
224 = 1.12Pt
Pt = 224/1.12
Pt = 200
If P = 200, then t = 1
Step 3: Let's interpret the answer and the problem we just wrote.
What is the amount of principal and the time of deposit for a savings account that earns 12% annually, and shows a final balance of $ 224?
Answer: $ 200 and the period of time is 1 year.