Question

Hoyt Axton earned $244.80 interest in 9 months from an investment that paid 3.2% per year. Use the simple interest formula to find the amount initially invested

Answer 1

Given:

`\begin{gathered} \text{Interest,I}=\text{ \$244.80} \\ \text{Time,T}=9\text{months} \\ But\text{ 12months=1year} \\ T=(9)/(12)\text{years} \\ \text{Rate,R}=3.2\text{ \%} \end{gathered}`

We need to get to the principal.

`I=(P* T* R)/(100)`

Substituting these values into the formula;

`\begin{gathered} 244.80=(P*(9)/(12)*3.2)/(100) \\ Cross\text{ multiplying;} \\ 244.8*100=P*(9)/(12)*3.2 \\ 24480*12=P*9*3.2 \\ 293760=28.8P \\ \text{Dividing both sides by 28.8,} \\ (293760)/(28.8)=P \\ P=\text{ \$10,200} \end{gathered}`

The amount initially invested is known as the Principal.

Hence, the principal is $10,200