Question

"David invested in a savings bond for 4 years and was paid simple interest at an annual rate of 3%. The total interest that he earned was $84. How much did he

invest?If necessary, refer to the list of financial formulas.?"

Answer 1

David invested $700 in a savings bond which earned him $84 in simple interest over 4 years at an annual rate of 3%.

Step-by-step explanation:

The student asked: "How much did David invest in a savings bond if he was paid $84 in simple interest over 4 years at an annual rate of 3%?" To determine the investment amount, we use the formula for simple interest: Interest = Principal × Rate × Time. In this scenario, the Interest (I) is $84, the annual Rate (r) is 3% or 0.03 when expressed as a decimal, and the Time (t) is 4 years. Plugging in the values, we have $84 = Principal × 0.03 × 4. To solve for the Principal (P), we divide both sides of the equation by (0.03 × 4), which gives us:

Principal = $84 / (0.03 × 4)
Principal = $84 / 0.12
Principal = $700

Therefore, David invested $700 in the savings bond.