SOLUTION: After five years of earning interest at an annual rate of 3%, an investment has earned $950 in interest. To the nearest whole dollar, determine the amount of the initial investment
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Question 1127459: After five years of earning interest at an annual rate of 3%, an investment has earned $950 in interest. To the nearest whole dollar, determine the amount of the initial investment. Show all work for full credit.
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
you say "annual rate" and not "compounded annually" so I will assume you mean simple interest. If you need compound interest send me an email.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I = Interest
P = Principal (the initial investment)
r = rate of interest
t = time
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I = Prt
900 = P(0.03 * 5)
900 = P(0.15)
P(0.15) = 900
P = 900/0.15 = 6,000 was the initial investment
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