SOLUTION: Alice invested some money at 16% simple interest. At the end of the year the total amount of her original principal and the interest was $9280. How much did she originally invest?

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Question 1010740: Alice invested some money at 16% simple interest. At the end of the year the total amount of her original principal and the interest was $9280. How much did she originally invest?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
for simple interest, the formula for future value is:

f = p + (p * r * n)

f = future value
p = present value
r = interest rate per time period.
n = number of time periods.

in this problem:
f = 9280
p = what you want to find.
r = .16 per year
n = 1 year

the formula becomes:

9280 = p + p * .16 * 1 which becomes:

9280 = p + .16p which becomes:

9280 = 1.16 * p

divide both sides of this equation by 1.16 and solve for p to get:

p = 9280 / 1.16 = 8000

8000 was what she originally invest.

that 8000 earned .16 * 8000 = 1280 in interest.

at the end of the year, she had 8000 + 1280 = 9280.