Question

Vanessa deposited money into a bank account that earned 1.25% simple interest each year. After 1/2 year, she had earned $5.00 in interest on the account. If no other money was deposited into or withdrawn from the account, how much was her initial deposit

Answer 1

Answer:the answer is actually $800

Explanation:

Took the test and got it right :-)

Answer 2

In order to figure this out we first have to divide the interest by 2 since it was only half a year.

0.0125 ÷ 2 = 0.00625

We now divide the interest number 5 by 0.00625 to find the initial amount.

5 ÷ 0.00625 = 800

To check this answer, multiply 800 by 0.00625.

800 × 0.00625 = 5