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Your mom opened a college fund for you when you were born. The fund had an annual interest rate of 2.5%. When you turned 18, the account had earned $4,275 in interest. What was the amount your mom deposited when you were born? Use the formula: I = Prt.

Verified Answer :

Lets subsitute in what we know into the equation.
(Interest) = (Principal) × (Rate) × (Time)
Combine like terms by multiplying.
4275 = P × 2.5% × 18
Divide both sides by 0.45.
4275 = 0.45P
The answer is $9,500.
Your mom deposited $9,500 when you were borned.


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