Question

Jake earned $1.155 in interest from his savings account over the last 5 years. The account has an annual rate of 1.25% how much did jake originally deposit in his account as his principal?

Answer 1

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Answer:

$18.48

Explanation:

If we assume the account earned simple interest, the amount is given by the formula ...

I = Prt . . . . interest on principal P at annual rate r for t years

1.155 = P·0.0125·5

P = 1.155/0.0625 = 18.48

Jake initially deposited $18.48 as his principal.

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Additional comment

The amount $1.155 is an unusual specification for an amount of money. If you mean $1,155.00, then the principal amount is likewise multiplied by 1000: $18,480.