Question

A certificate of deposit has an annual simple interest rate of 5.25%. If $567 in interest is earned over a 6 year period, how much was invested?

Answer 1

Find the the amount of interest per year. Since $567 were earned over 6 years, you divide the interest earned by the number of years it took to accumulate it:

$567/6 years = $94.5/year

Divide that by the interest rate which the interest rate needs to be in decimal form:

$94.5/.0525 = $1800