A year ago we placed some money in a bank account with an annual simple interest of 13%. How much did we deposit there a year ago if now there is $1356 in the account?

Question

A year ago we placed some money in a bank account with an annual simple interest of 13%.  How much did we deposit there a year ago if now there is $1356 in the account?

anonymous · Answer

I'm lost as to how to approach the problem, can someone please help?

tkhunny · Answer

I = Prt  Always think about this.  This is what Simple Interest is all about.

We have r = 0.13

I = P(0.13)t

We have t = 1

I = P(0.13)(1) = P(0.13)

We have 1356.  This is made up of the original deposit, P, and the Interest Earned, I

1356 = P + I = P + P(0.13) = P(1.13)

One step at a time.  Can you finish?

anonymous · Answer

We're its 1200 thanks! I got it now!