Alice invested some money at 5% simple interest. At the end of the year the total amount of her original principal and the interest was $525. How much did she originally invest?
2006-07-18 10:46:02 · 5 answers · asked by prgurl2001 2 in Science & Mathematics ➔ Mathematics
525 = 1.05 * x
525/1.05=x
500=x
500 was the original investment. Think of it as 5% of 100 over one year is $5. So 5% of 500 over 1 year = $25. Plus original investment of 500 = $525
2006-07-18 10:49:13 · answer #1 · answered by dr. misako 2 · 3⤊ 0⤋
FV = P(1+rt)
FV = future value, P = principle, r = rate and t = number of years
FV = 525, r = .05 and t = 1
525 = P(1+(.05)(1))
525 = P(1+.05)
525 = P(1.05)
525/1.05 = P
P = 500
2006-07-18 17:58:22 · answer #2 · answered by MsMath 7 · 0⤊ 0⤋
Simple API = 525$ / 1.05 = $500
If it's compound interest it would actually be $493.85
2006-07-18 17:49:37 · answer #3 · answered by more_evil_then_santa 6 · 0⤊ 0⤋
How many payments did she make? Where the payments applied to the principle or the interest? Where there any fees? There are too many unknownm variables there to answer that question. Can you fill in the blanks?
2006-07-18 17:53:11 · answer #4 · answered by abehagenston 2 · 0⤊ 0⤋
$525.00 / 1.05 = $500
2006-07-18 17:49:43 · answer #5 · answered by Whiteboard Guy 3 · 0⤊ 0⤋