Question

When invested at an annual interest rate 7% an amount earned 11,200 of simple interest in two years. how much money was originally invested?

Answer 1

To find the original amount of money invested at an annual interest rate of 7% for two years, divide the earned interest by the product of the rate and time. The original amount invested was $80,000.

Step-by-step explanation:

To find the original amount of money invested, we can use the formula for simple interest: Interest = Principal * Rate * Time.

In this case, the interest earned is $11,200, the rate is 7% (0.07), and the time period is two years.

So, the equation becomes: 11,200 = Principal * 0.07 * 2.

Dividing both sides of the equation by 0.14, we get: Principal = 11,200 / 0.14 = $80,000.

Therefore, the original amount of money invested was $80,000.