If the company earned a total of $37,500 in interest last year,how much cash did they keep in the bank

Question

I need help I really don’t understand this math problem

Answer 1

To answer this question, we need to know the interest rate.

Let’s say the interest rate was 5% per year. Then interest would be 5% of the money they had in the bank, which is $37500. 5/100=37500/?. So we can write this as 5×7500/100×7500=37500/750000. Therefore ?=$750,000. In other words, $37,500 is 5% of $750,000.

Another way to solve it is to say if 5% is equivalent to $37,500, then 100% is 20 times as much as 5%, so the amount must be 20 times $37,500=$750,000. It’s simple proportion.

Find out what the actual interest rate is and use one of these methods to find your answer.