Kwang deposits money in an account that earns 5% per year simple interest. He earned a total of $546 in interest by the end of the second year. How much did he deposit?

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Answer 1 · 2018-06-12T09:11:31

#$5460.00#

Let the initial deposit (principle sum) be #x#

As this is over a 2 year period the total interest earned is:

#color(white)("dddddd")5/100 xx2=10/100=1/10#

#color(white)("dddddddddddddddd")color(brown)(uarr)#
#color(brown)(obrace("You can not do this with compound interest"))#

So we have:

#1/10xx x=$546#

Multiply both sides by 10

#x=$5460#