Algebra Word Problem

Question

At a bank an investment of $14,575 earns $190 per year in interest. How much additional money would you need to invest at the bank in order to increase the interest per year to $300? Round to the nearest hundredths. For purposes of this problem, finding out how much of an investment is needed to earn $300 in interest per year and then subtracting 14,575 from this amount is not an option.

Answer 1

Interest Rate = Interest Earned / Principal

=$190 / $14,575 = 0.013036

meaning that the calculation for this scenario is

additional investment = additional interest / interest rate

= $110 / 0.013036 = $8,438.16

so you would need to invest an additional $8,438.16

Answer 2

I would first determine the interest rate by dividing the interest earned by the investment: $190/$14,575= 0.013

Then I would find out how much more interest I want to make $300-$190 = $110

Then I would divide the interest I want to make by the interest rate: $110/0.013 = $8461.54