Natalie opened a bank account that earns 2.5% simple interest. If her account earned $180 over the next ten years, how much was Natalie’s initial deposit when she opened the account?
Accepted Solution
A:
Answer: $720.Step-by-step explanation:The formula to find the simple interest is given by :-[tex]I=Prt[/tex], where P is the principal amount , r is the rate of interest in decimal and t is the time in years.Given : Rate of interest : r= 0.025Simple interest : I= $180Time : t=10Let P be the Natalie’s initial deposit when she opened the account, then we have:-[tex]180=P(0.025)(10)\\\\\Rightarrow\ P(0.25)=180\\\\\Rightarrow\ P=\dfrac{180}{0.25}=\dfrac{18000}{25}=720[/tex]Hence, the Natalie’s initial deposit when she opened the account was $720.