Question

Ralph invested in a mutual fund and at the end of 20 years he has $14,300 in his account. If the mutual fund returned an average yield of 8%, how much did he originally invest?

Answer 1

Answer:

$\ 5,500$

Step-by-step explanation:

we know that

The simple interest formula is equal to

$A=P(1+rt)$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  

t is Number of Time Periods

in this problem we have

$t=20\ years\\ P=?\\ A=\ 14,300\\r=8\%=8/100=0.08$

substitute in the formula above

$14,300=P(1+0.08*20)$

$14,300=P(2.6)$

$P=14,300/(2.6)$

$P=\ 5,500$