Question

You invest a certain amount of money at an interest rate of 6% for 4 years, and earn $168 in interest, how much did you originally invest?

Answer 1

Amount originally invested = $700

Explanation:

[This answer assumes that the interest is simple interest.]

We are told that upon investing a certain amount of money for 4 years at a rate of 6%, we get $168 in interest. We are then asked to calculate the amount originally invested.

To solve this problem, we have to use the formula for simple interest:

`\boxed{I = PRT}`,

where:

• I ⇒ interest = $168

• P ⇒ principal (original) amount = $?

• R ⇒ interest rate = 6% = 0.06

• T ⇒ time for which the money is invested = 4 years.

Using the above formula and rearranging it to make P the subject of the equation, we can calculate the principal amount:

`I = PRT`

⇒
`P = \frac {I}{RT}`

⇒
`P = (168)/(0.06 * 4)`

⇒ P = 700

Therefore, the amount originally invested was $700.