Kelly opened a bank account that earns 1.2% simple interest each year. After 7 years, Kelly will earn $126 in interest. How much did Kelly deposit when she opened the account?

Question

Mathematics

Mcgee

21 November, 16:43

Kelly opened a bank account that earns 1.2% simple interest each year. After 7 years, Kelly will earn $126 in interest. How much did Kelly deposit when she opened the account?

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Answers (1)

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Dorsey · Answer 1

13.4 dollars

Step-by-step explanation:

The final amount is given by:

F=I (1+rt)

Where

I = initial amount

r = interest rate

t = time interval

F = final amount

Now in our case

r = 1.2

t = 7

F = $126

Therefore I=F / (1+rt) = 126 / (1+1.2*7) = 13.4 dollars.