Calculate the amount of money invested at 9.25% per annum, when $5 781.25 simpleinterest was collected after 5 years.
Question
Calculate the amount of money invested at 9.25% per annum, when $5 781.25 simpleinterest was collected after 5 years.
Solution 1
To calculate the amount of money invested, we can use the formula for simple interest which is:
I = PRT
where: I = Interest P = Principal amount (the initial amount of money) R = Rate of interest T = Time the money is invested for
We are given: I = $5,781.25 R = 9.25% = 0.0925 (in decimal form) T = 5 years
We need to find P. So, rearranging the formula to solve for P gives us:
P = I / (RT)
Substituting the given values into the formula:
P = $5,781.25 / (0.0925 * 5)
P = $5,781.25 / 0.4625
P = $12,500
So, the amount of money invested was $12,500.
Solution 2
To calculate the amount of money invested, we can use the formula for simple interest which is:
I = PRT
where: I = Interest P = Principal amount (the initial amount of money) R = Rate of interest T = Time the money is invested for
We are given: I = $5,781.25 R = 9.25% = 0.0925 (in decimal form) T = 5 years
We need to find P. So, rearranging the formula to solve for P gives us:
P = I / (RT)
Substituting the given values into the formula gives us:
P = $5,781.25 / (0.0925 * 5)
Now, calculate the value of P.
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