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 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 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.)
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 = 213.07 (rounded to 2 decimal places).
So, Amanda initially invested $213.07.
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