Mr. Brown had deposited a sum of money in a bank at an interest of 5%. If he got back $4,725 after 1 year, what was his principal?
A) $945
B) $1,000
C) $4,500
D) $4,700

Question

Quizplus · Accepted Answer

The interest earned in one year at 5% is part of the total amount Mr. Brown got back, which was $4,725. To find the principal, we subtract the interest from the total amount. The interest can be calculated as 5% of the principal. Let's denote the principal as P. The equation to represent the situation is P + 0.05P = $4,725. Simplifying, we get 1.05P = $4,725, and solving for P gives P = $4,725 / 1.05 = $4,500.

Mr Brown Had Deposited a Sum of Money in a Bank