Question

Linda Murray's investment earned $77.00 in simple interest in 6 months at an annua

nterest rate of 7%. How much money did she invest?

Answer 1

`\$2,200`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final 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=6/12=0.5\ years\\ P=?\\ I=\$77.00\\r=7\%=7/100=0.07`

substitute in the formula above

`77.00=P(0.07*0.5)`

solve for P

`77.00=0.035P`

`P=77.00/0.035`

`P=\$2,200`