Question

My District PortalP Performance MatteMackinVIA ReaderiReady - Measure L.My District Portal Treefrog Treasurehttps://www.palmb...New folderfor School: Practice & Problem SolvingAssignment is past d3.6.PS-14Question HelpAdvertising A bank manager wants to encourage new customers to open accounts with principals ofat least $3,500. He decides to make a poster advertising a simple interest rate of 4.8%. What mustthe principal be if the bank manager also wants to advertise that one can earn $10 the first month?Can the poster correctly say, "Open an account of $3,500 and earn at least $10 interest in 1 month!"?The principal needs to be $ to earn $10 in interest the first month.(Round to the nearest dollar as needed.)Enter your answer in the answ

Answer 1

we know that

The simple interest formula is equal to

$A=P(1+rt)$

$A=P\mleft(1+rt\mright)$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

step 1

Find out the interest in one month

so

we have

P=$3,500

r=4.8%=4.8/100=0.048

t=1 month=1/12 years

substitute in the formula

$\begin{gathered} A=3,500(1+0.048\cdot\frac{1}{12}) \\ A=\ 3,514 \end{gathered}$

that means

the interest is equal to

I=A-P

I=3,514-3,500=$14

the answer part a is

Yes, the poster can correctly say, "Open an account of $3,500 and earn at least $10 interest in 1 month!"

Part b

Find out the principal needeed to earn $10 in interest the first month\

we have

P=?

r=0.048

t=1/12 years

I=$10

the formula of interest is equal to

$I=P(rt)$

substitute

$\begin{gathered} 10=P(0.048\cdot\frac{1}{12}) \\ P=\ 2,500 \end{gathered}$

therefore

teh answer part b is $2,500