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QuestionMr. Pang deposited money at 0.9%0.9\% interest for 3 years, receiving $174590\$ 174590. What was the interest earned?

Studdy Solution

STEP 1

Assumptions1. The total amount received after3 years is $174,590. The interest rate is0.9% per annum3. The time for which the money was deposited is3 years4. The interest is calculated as simple interest, not compounding5. The total amount received includes both the principal amount and the interest

STEP 2

First, we need to find the formula for simple interest. The formula for simple interest isInterest=Principal amounttimesInterest ratetimesTimeInterest = Principal\, amount \\times Interest\, rate \\times Time

STEP 3

We know the total amount received, the interest rate, and the time. But we don't know the principal amount or the interest. However, we can rearrange the simple interest formula to solve for the principal amountPrincipal amount=Total amount1+Interest ratetimesTimePrincipal\, amount = \frac{Total\, amount}{1 + Interest\, rate \\times Time}

STEP 4

Now, plug in the given values for the total amount, interest rate, and time to calculate the principal amount.
Principal amount=$174,5901+0.9%times3Principal\, amount = \frac{\$174,590}{1 +0.9\% \\times3}

STEP 5

Convert the percentage to a decimal value.
0.9%=0.0090.9\% =0.009Principal amount=$174,5901+0.009times3Principal\, amount = \frac{\$174,590}{1 +0.009 \\times3}

STEP 6

Calculate the principal amount.
Principal amount=$174,5901+0.009times3=$170,000Principal\, amount = \frac{\$174,590}{1 +0.009 \\times3} = \$170,000

STEP 7

Now that we have the principal amount, we can find the interest amount. This can be done by subtracting the principal amount from the total amount received.
Interest=Total amount−Principal amountInterest = Total\, amount - Principal\, amount

STEP 8

Plug in the values for the total amount and the principal amount to calculate the interest.
Interest=$174,590−$170,000Interest = \$174,590 - \$170,000

STEP 9

Calculate the interest amount.
Interest=$174,590−$170,000=$4,590Interest = \$174,590 - \$170,000 = \$4,590Mr Pang received an interest of $4,590.

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