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Q: homework ( Answered,   0 Comments )
Subject: homework
Category: Reference, Education and News
Asked by: cindyb-ga
List Price: $2.00
Posted: 08 Nov 2002 07:08 PST
Expires: 08 Dec 2002 07:08 PST
Question ID: 102680
A man goes in the bank and set up an account with a 9.5% annual
interest. At the end of the year,  his account has earned $475.00.
What was the amount he originally deposit?

Request for Question Clarification by omnivorous-ga on 08 Nov 2002 07:44 PST
Cindy --

This simple question is actually unanswerable until the researcher
knows when the interest compounds.  Is it daily?  Monthly?  Quarterly?

Best regards,

Subject: Re: homework
Answered By: johnny_phoenix-ga on 08 Nov 2002 08:02 PST
Hello cindyb 

I note what omnivorous says but since your question states that the
interest has 9.5% annual interest, I would take it at face value that
the interest is paid annually.

Therefore in order to work out the figure we need to know what figure
$475.00 is actually 9.5% of.

 $475 divided by 9.5% = $5000.00.

$5000.00 was the initial sum invested

Working out 

9.5% = 0.095, i.e. 9.5 divided by 100. 

475 divided by  0.095 = 5000


If we invested $5000.00 in an account with 9.5% annual interest, what
interest would we have after one year.

$5000 * 0.095 = $475.00

I hope this is sufficient and helps you to understand the workings out
for future questions of this nature.

Johnny Phoenix
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