# Algebra - Balance in Account that Pays Simple Interest

Three years after opening an account that paid simple interest of 6.6% annually, a depositor withdrew the \$2,376.00 in interest earned.

How much money was left in the account?

### Comments for Algebra - Balance in Account that Pays Simple Interest

 Dec 22, 2013 Simple Interest Calculations by: Staff Answer Part I simple annual interest interest = P * i * n P = initial deposit in account. No amount was listed in the problem statement, so P is an unknown. i = 0.066 (the interest rate in decimal form: 6.6% ÷ 100 = .066) n = 3 years interest = P * 0.066 * 3 interest = 0.198P ---------------------------------------------------------------------

 Dec 22, 2013 Simple Interest Calculations by: Staff --------------------------------------------------------------------- Part II Balance left in account after withdrawing \$2,376.00 Balance = initial deposit + interest earned - withdrawal Balance = P + 0.198P - \$2,376.00 Balance = 1.198P - \$2,376.00 ---------------------------------------------------------------------

 Dec 22, 2013 Simple Interest Calculations by: Staff --------------------------------------------------------------------- Part III the final answer Balance = 1.198P - \$2,376.00 as a final note: determine the amount of the deposit "P" which is needed to provide a total balance of \$2,376.00 at the end of three years set the balance to zero Balance = 1.198P - \$2,376.00 0 = 1.198P - \$2,376.00 0 + \$2,376.00 = 1.198P - \$2,376.00 + \$2,376.00 \$2,376.00 = 1.198P - \$2,376.00 + \$2,376.00 \$2,376.00 = 1.198P + 0 \$2,376.00 = 1.198P \$2,376.00 / 1.198 = 1.198P / 1.198 \$2,376.00 / 1.198 = (1.198 / 1.198) * P \$2,376.00 / 1.198 = (1) * P \$2,376.00 / 1.198 = P \$1,983.305509 = P P ≈ \$1,983.31 The depositor must initially deposit at least \$1,983.31 to guarantee that \$2,376.00 can be withdrawn three years after opening the account. Thanks for writing. Staff www.solving-math-problems.com