fatimamalhi00
Answered

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Daniel deposits a certain sum of money in a bank. If the simple interest rate of the bank decreases from 3.75% per annum to 3.5% per annum, Daniel's interest will increases by $50 in a year. Find the sum of money he deposits.


The answer is $20000 but I don't understand how. Please give a step-by-step explanation.

Sagot :

Answer: $20,000

Step-by-step explanation:

Given

Interest decreases from 3.75% to 3.5% in a year

This change in the rate of interest brings a yield of 50$

Earlier interest was

[tex]S.I_e=\dfrac{P\times 3.75\times 1}{100}[/tex]

Now, interest is

[tex]S.I._n=\dfrac{P\times 3.5\times 1}{100}[/tex]

change gives 50$ i.e.

[tex]\Rightarrow \dfrac{P\times 3.75\times 1}{100}-\dfrac{P\times 3.5\times 1}{100}=50\\\\\Rightarrow \dfrac{P\times (3.75-3.5)\times 1}{100}=50\\\\\Rightarrow P=\dfrac{50\times 100}{0.25}=\$20,000[/tex]

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