Question

Jeremy deposited money into a savings account that pays a simple annual interest rate of 1.6%. He earned $55.04 in interest after 4 years. How much did he deposit ?

A. $860
B. $1376
C. $2976
D. $3440

Answer 1

Answer:

the answer is 860

Step-by-step explanation:

Answer 2

The principal value is $860. So, option A is correct.

Important information:

• Rate of simple interest = 1.6%
• Simple interest = $55.04
• Time = 4 year

We need to find the principal amount.

Simple interest:

The formula for simple interest is:

$I=\dfrac{p\times r\times t}{100}$

Substitute the given values.

$55.04=\dfrac{p\times 1.6\times 4}{100}$

$5504=6.4p$

$\dfrac{5504}{6.4}=p$

$860=p$

The principal value is $860. So, option A is correct.

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