Question

How much did you invest if you earned $131.60 in interest at a rate of 4% for seven years?

Answer 1

The amount invested is $ 470

Solution:

Given that , we have earned $131.60 as simple interest for an amount deposit at the rate of 4% for seven years.

We have to find the amount invested. That is, we need to find the principal sum

Let us use the simple interest formula

The simple interest is given as:

`\text { Simple interest }=\frac{p r i n c i p a l * \text {rate of interest } * \text {number of years}}{100}`

Here, simple interest = $ 131.60

Rate of interest = 4 %

Number of years = 7

principal = ?

Substituting the values in formula, we get

`\begin{array}{l}{131.6=\frac{\text { principal } * 4 * 7}{100}} \\\\ {131.6 * 100=\text { principal } * 4 * 7} \\\\ {13160=\text {principal } * 28} \\\\ {\text {Principal }=470}\end{array}`

Thus the amount invested is $ 470