Question

Sheldon made a deposit into an account that earns 8% simple interest. After 8 years Sheldon earns $800. What was his initial deposit?

Answer 1

$1250

Explanation:

Given data

Rate= 8%

Time= 8years

Simple interest= $800

Required

The principal P

We know that the expression for simple interest is given as

SI=PRT/100

substitute

800= P*8*8/100

cross multiply

800*100= 64P

80000=64P

divide both sides by 64

P= 80000/64

P=$1250

Hence the initial deposit was $1250