help me solve

Question

Bob makes an investment at 4% simple interest. at the end of 1 year, the total value of the investment is $1560. How much was originally invested?

Answer 1

The formula for simple interest is I = P*R*T where 

 

I = Interest

P = Principal or initial value

R = Rate as a decimal = 0.04

T = Time = 1 year 

 

The total value is Principal plus Interest so 

 

P + I = 1560

P + P*R*T = 1560

P*(1 + R*T) = 1560

P*(1 + (0.04)*(1)) = 1560

P*(1.04) = 1560

P = 1560 / 1.04 = $1500 originally invested

 

Check:  I = 1500*(0.04)*(1) = 60, P + I = 1560