Question

Christian earned $631.40 in 7 years on an investment at a 5.5% simple interest rate. How much was Christian's investment?

Answer 1

`\$1,640`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the interest 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 and solve for P

`631.40=P(0.055*7)`

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