Finite Math

A bank deposit paying simple interest at the rate of 8% per year grew to a sum of $1200 in 10 months. Find the principal. (Round your answer to the nearest cent.)

  1. 👍 0
  2. 👎 0
  3. 👁 131
asked by Dee
  1. Simple interest is paid when the money is paid back (or in this case, withdrawn). That is not how banks compute interest either owed or paid, but since they want you to do it that way, here is what you do:

    If the initial principal is X,

    X*(1 + 0.08*(10/12)) = 1200.00

    X*(1.06666667) = 1200

    X = 1125.00

    1. 👍 0
    2. 👎 0
    posted by drwls

Respond to this Question

First Name

Your Response

Similar Questions

  1. Alg2

    Help....Help... Suppose you deposit a principal amount of p dollars in a bank account that pays compound interest. If the annual interest rate r (expressed as a decimal) and the bank makes interest payments n times every year, the

    asked by Rock on December 12, 2011
  2. Alg 2

    Suppose you deposit a principal amount of p dollars in a bank account that pays compound interest. If the annual interest rate r (expressed as a decimal) and the bank makes interest payments n times every year, the amount of money

    asked by rock on December 13, 2011
  3. College alerbra

    Scott invested a total of $9500 at two separate banks. One bank pays simple interest of 11% per year while the other pays simple interest at a rate of 9% per year. If Scott earned $973.00 in interest during a single year, how much

    asked by Matt on November 23, 2013
  4. pre calc

    Formulate a system of equations for the situation below and solve. Michael Perez deposited a total of $3000 with two savings institutions. Bank A pays interest at the rate of 6%/year, whereas Bank B pays interest at the rate of

    asked by Melissa on January 5, 2017
  5. Math

    Asher cashed in a one-year term deposit after only five months had elapsed. In order to do so, he accepted an interest rate penalty—a reduction from the scheduled 5.5% rate of simple interest. If he was paid $145.83 interest on

    asked by Anonymous on May 5, 2014
  6. Social Studies

    I was wondering if I could check my answers with someone. I'm a bit confused with interest. I put stars next to the answers I chose. Thank you. An interest rate is a special type of (1 point) loan. **price. bank. service. 2. How

    asked by Greg on November 14, 2012
  7. Social Studies

    An interest rate is a special type of (1 point) loan. **price. bank. service. 2. How does a compound interest rate differ from a simple interest rate? (1 point) ***Compound interest rates pay more interest over time. Compound

    asked by Hayley on August 9, 2017
  8. pre algebra 6th grade

    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?

    asked by Suzanne on December 7, 2010
  9. Math Economics

    1. Jacksonville Technical College received $3,445,553 in state aid on September 15 for the fall academic semester. The vice-president for finance decided to invest $2,000,000 in a 2-month investment that pays 11.5% simple

    asked by Alex on June 27, 2012
  10. Math

    . Jacksonville Technical College received $3,445,553 in state aid on September 15 for the fall academic semester. The vice-president for finance decided to invest $2,000,000 in a 2-month investment that pays 11.5% simple interest.

    asked by Alex on July 1, 2012

More Similar Questions