Question

John wants to invest in a simple intereset savings account The intereset rate on this account is 0.7%. The account balance y can be modeled by the following linear equation: y=150,000+150,000(0.007)x where x represents the time (in years) that John leaves her money in the account. What is Johns Initial investment?

Answer 1

Answer: John's Initial investment is $150,000

Explanation:

Hi, to answer this question we have to apply the simple interest formula:

I = p x r x t

Where:

I = interest

P = Principal Amount (or initial investment)

r = Interest Rate (decimal form)

To obtain the total balance we have to add the principal amount and the interest.

p+ p x r x t

Analyzing the values given:

y=150,000+150,000(0.007)x

p = 150,000

John's Initial investment is $150,000