Answer:
Explanation:
r:=interest rate =7%
p = unknown
Principle + interest = 4280
t = 1 year
Formula
Total = p*r*t + p
4280 = p*(1 + r*t)
4280 = p*(1 + 7/100 * 1)
4280 = p (1.07)
4280 / 1.07 = p
P = 4000
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What this means is that if you loan out 4000 dollars for a year at 7%, you will get 280 dollars in return (plus of course your 4000). However in this day and age, try getting 7%.
The 100 dollar problem is the same thing. This time you have P and you want the total.
Total = p(1 + r*t)
Total = 100 (1 + 7/100 * 1
Total = 100 ( 1 + 0.07)
Total = 107
So the principle is given and the value of the investment after 1 year is 107 dollars.