Question

A savings bond currently made Jamar $2,112.64 worth of interest in 7 years. If the investment gained 5.5% annual simple interest each year, approximately how much was the bond originally bought for?

Answer 1

$5487.38

Explanation:

Given that:

Interest currently made = $2112.64

Time = 7 years

Rate of interest = 5.5% annual

To find:

The price for which the bond was originally bought ?

Solution:

We need to find nothing but the principal amount.

First of all, let us have a look at the formula for Simple Interest.

`Simple\ Interest = (PRT)/(100)`

Where
`P` is the principal amount

`R` is the Rate of Interest

`T` is the time for which the investment is made

Let us put the given values in the formula:

`2112.64 = (P* 5.5* 7)/(100)\\\Rightarrow P =(2112.64* 100)/(5.5* 7)\\\Rightarrow P =(211264)/(38.5) \\\Rightarrow \bold{P =\$5487.38}`