Question

Jonah earned $150.36 in interest on an account that earns 1.4% simple interest. If

Jonah opened the account 12 years ago, what was the principal amount?
A) $850
B) $868
C) $880
D) $895
E) $902

Answer 1

Jonah's initial investment (principal amount) that earned $150.36 in simple interest at a 1.4% rate over 12 years is calculated using the formula I = PRT. The correct answer is $895.

Step-by-step explanation:

The student has asked how to calculate the principal amount of an investment that earned $150.36 in interest at a rate of 1.4% simple interest over a period of 12 years. To do this, we can use the formula for simple interest: I = PRT, where I is the interest earned, P is the principal amount, R is the interest rate (as a decimal), and T is the time in years.

Plugging the given values into the formula and solving for P gives us a way to find out the initial investment made by Jonah.

First, we convert the percentage rate to a decimal: R = 1.4% = 0.014. Then, we have the interest, I = $150.36, and the time, T = 12 years. Now, plug these values into the formula:

I = PRT
150.36 = P * 0.014 * 12

Now solve for P:

P = 150.36 / (0.014 * 12)
P = 150.36 / 0.168
P = $895

Thus, the principal amount that Jonah invested 12 years ago is $895. Therefore, the correct answer is D) $895.