Anita deposited an amount at a bank for a year. At the end of the year, she received an interest of GH \$120.00. If the bank gives an interest of 8% a year, find the amount she deposited.
Answer (1)
Define the principal amount as P .
Express the interest earned as 0.08 \t \t × P = 120 .
Solve for P by dividing both sides by 0.08 .
The amount Anita deposited is 1500 .
Explanation
Problem Analysis Let's analyze the problem. We know that Anita received GH$120.00 in interest after one year, and the bank's interest rate is 8% per year. We need to find the original amount she deposited.
Setting up the Equation Let P be the amount Anita deposited. The interest received is 8% of the deposited amount. We can write this as an equation: 0.08 × P = 120
Solving for P To find the deposited amount P , we need to solve the equation for P . We can do this by dividing both sides of the equation by 0.08: P = 0.08 120
Finding the Deposited Amount Now, we perform the division: P = 1500 So, Anita deposited GH$1500.00.
Examples
Understanding simple interest calculations is useful in many real-life scenarios. For example, when you deposit money in a savings account, the bank pays you interest. Knowing how to calculate the principal amount needed to achieve a specific interest amount can help you plan your savings goals. Similarly, when taking out a loan, understanding the interest rate and how it affects your payments is crucial for managing your finances effectively. This problem illustrates a fundamental concept in financial planning and investment.
