Question

After five years of earning interest at an annual rate of 4%, an investment has earned $1,200 in interest. Determine the amount of the initial investment. Show all work for full credit.

Answer 1

Answer:

Interest = $1200

Rate=4%

Term=5 years

Principal=?

P=1200×100/5×4

=120000/20

$6000

Total Amount =$6000+$1200

=$7200