Question

jim invested in a savings bond for 6 years and was paid simple interest at an annual rate of 3%. the total interest that he earned was $540. how much did he invest?

Answer 1

the principal or invested amount is $457.63

Explanation:

The computation of the invest amount is given below:

As we know that

Principal = AMount ÷ (1 + rate × time)

= $540 ÷ (1 + 0.03 × 6)

= $540 ÷ 1.18

= $457.63

Hence, the principal or invested amount is $457.63

Basically we have applied the above formula so that the same would be calculated