To find out how much money Donovan had in his savings account at the start of the year, we can use the formula for calculating interest:
\[ \text{Interest} = \text{Principal} \times \text{Rate} \]
Where:
- Interest is the amount earned (which is $37.50 in this case),
- Principal is the initial amount of money in the account (what we want to find),
- Rate is the interest rate (3% or 0.03 in decimal form).
Since we know the interest earned and the interest rate, we can rearrange the formula to solve for the Principal:
\[ \text{Principal} = \frac{\text{Interest}}{\text{Rate}} \]
Now, we can plug in the values:
\[ \text{Principal} = \frac{37.50}{0.03} \]
Calculating that gives:
\[ \text{Principal} = 1250 \]
Therefore, the amount of money that was in Donovan’s account at the start of the year was $1250.
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