Question

Alonzo invested in a savings bond for 4 years and was paid simple interest at an annual rate of 5%.The total interest that he earned was 1,000. How much did he invest?

Answer 1

To solve this type of question, we can use the formula for simple interest:

`A=P(1+rt),`

where A is the final amount, P is the initial amount, r is the annual interest rate, and t is the time in years.

Substituting A= 1000, t=4, and r=0.05, we get:

`1000=P(1+0.05*4).`

Solving the above equation for P we get:

`\begin{gathered} (1000)/((1+0.2))=P, \\ P=(1000)/(1.2), \\ P=833.3\bar{3}. \end{gathered}`

Answer: He invested

`833.\bar{3}.`