Question

Basil earned $631.40 in 7 years on an investment at a 5.5% simple interest rate. how much was basils investment

a. $496
b. $1640
c. $16,400
d. $80,360

Answer 1

Option B.
`\$1,640`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

A is the interest amount Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=7\ years\\ I=\$631.40\\r=0.055`

substitute in the formula above

`\$631.40=P(0.055*7)`

`P=\$631.40/(0.055*7)=\$1,640`