Question

3. What amount of money is necessary to be invested at 5% simple interest to yield $320 in interest after 4 years?

Answer 1

Answer:

$Amount = \ 1920$

Step-by-step explanation:

Given

$Interest =\ 320$

$Rate = 5\%$

$Years = 4$

Required

Determine the invested amount

First, we need to determine the Principal

This is calculated as:

$Interest = Principal * Rate * Time$

Solve for Principal

$Principal = \frac{Interest}{Rate * Time}$

$Principal = \frac{\ 320}{0.05 * 4}$

$Principal = \frac{\ 320}{0.2}$

$Principal = \ 1600$

Add the principal to the interest

$Amount = Principal + Interest$

$Amount = \ 1600 + \ 320$

$Amount = \ 1920$