Question

An investment gains an average of 10% simple interest for 6 years, at which time its value is $24,000. How much was originally invested?

Answer 1

Given:

An investment gains an average of 10% simple interest

So, r = 10% = 0.1

The time = t = 6 years

The investment at the time = A = $24,000

We will find the original invested using the following formula:

$A=P(1+rt)$

Substitute with A, r, and t

$24000=P\cdot(1+0.1\cdot6)$

Solve the equation to find P

$\begin{gathered} 24000=P\cdot1.6 \\ \\ P=\frac{24000}{1.6}=15000 \end{gathered}$

So, the answer will be the originally invested = $15,000