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After 88 years, Amanda's account earned $1500$⁢1500 in interest. If the interest rate (in decimal form) is 0.080.08, how much did Amanda initially invest?Amanda's Bank StatementInterest Earned $1500$⁢1500Rate 0.080.08Time 88 YearsPrincipal Invested ?Step 3 of 3: Finally, solve the problem by substituting in the appropriate values. (Round your answer to 2 decimal places if necessary.)

Question

After 88 years, Amanda's account earned 15001500⁢1500 in interest. If the interest rate (in decimal form) is 0.080.08, how much did Amanda initially invest?Amanda's Bank StatementInterest Earned 15001500⁢1500Rate 0.080.08Time 88 YearsPrincipal Invested ?Step 3 of 3: Finally, solve the problem by substituting in the appropriate values. (Round your answer to 2 decimal places if necessary.)

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Solution

The formula for calculating the interest earned on an investment is I = PRT, where I is the interest earned, P is the principal amount (initial investment), R is the rate of interest, and T is the time the money is invested for.

In this case, we know that I = $1500, R = 0.08, and T = 88 years. We want to find P.

Rearranging the formula to solve for P gives us P = I / (RT).

Substituting the known values into this formula gives us P = $1500 / (0.08 * 88).

Calculating this gives us P = 1500/7.04=1500 / 7.04 = 213.07 (rounded to 2 decimal places).

So, Amanda initially invested $213.07.

This problem has been solved

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