SOLUTION: During a certain period, a manufacturing company invested some money in a bank at 40% simple interest per annum. Given that after 6 months, the total value of the investment was $8

Question 1121607: During a certain period, a manufacturing company invested some money in a bank at 40% simple interest per annum. Given that after 6 months, the total value of the investment was $840,00 calculate the amount invested.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
with simple interest, the formula used is:

i = p * r * n

i is the interest
p is the principal
r is the interest rate per time period
n is the number of time periods

also:

f = p + i

f is the future value
p is the principal
i is the interest

in your problem.

r = 40% per year = .4 per year = .4/12 per month

n = 6 months

formula for i says i = p * r * n which becomes i = p * .4 / 12 * 6 which becomes i = p * .2.

f = p + i becomes f = p + p * .2.

since f = 840, this formula becomes 840 = p + p * .2 which becomes 840 = p * (1 + .2) which becomes 840 = p * 1.2.

divide both sides by 1.2 to get 840 / 1.2 = p = 700.

the principal amount is 700.

using p = 700 and r = .4/12 and n = 6, you get i = 700 * .4/12 * 6 = 140

f = p + i becomes f = 700 + 140 = 840.

numbers check out.

solution is that the amount invested is 700.

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