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

Answer:

$5487.38

Step-by-step 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.

$Simple\ Interest = \dfrac{PRT}{100}$

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:

$2112.64 = \dfrac{P\times 5.5\times 7}{100}\\\Rightarrow P =\dfrac{2112.64\times 100}{5.5\times 7}\\\Rightarrow P =\dfrac{211264}{38.5} \\\Rightarrow \bold{P =\ 5487.38}$