Tara's bank account contains $250.00. She made only one deposit exactly one year ago. The bank account pays a simple interest rate of 8%. How much money did Tara deposit in the account one year ago?
1.08x = 250
x = 250/1.08
x = ?
250=x-.08x
250=(1-.08)x
250/(1-.08)=x
271.73=x
$20.00
To find out how much money Tara deposited in the account one year ago, we can use the formula for simple interest:
Simple Interest = Principal * Interest Rate * Time
We are given that the current balance (Principal) in Tara's bank account is $250.00 and the interest rate (Interest Rate) is 8%. We need to find the amount of money (Principal) she originally deposited.
Let's plug the given values into the formula and solve for Principal:
Simple Interest = Principal * Interest Rate * Time
$250.00 = Principal * 0.08 * 1
Now, let's isolate Principal:
Principal = $250.00 / (0.08 * 1)
Principal = $250.00 / 0.08
Principal = $3125.00
Therefore, Tara originally deposited $3125.00 in the account one year ago.