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Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit?

a. $2,524.50
b. $4,024.03
c. $4,250.00
d. $11,404.88

Sagot :

jesusm1

Answer:

First, converting R percent to r a decimal

  • r = R/100 = 2.7%/100 = 0.027 per year.

Solving our equation:

  • P = 6774.5 / ( 1 + (0.027 × 22)) = 4250
  • P = $4,250.00

  • The principal investment required to get a total amount, principal plus interest, of $6,774.50 from simple interest at a rate of 2.7% per year for 22 years is $4,250.00
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The initial deposit amount is $4,250.00.

Given that,

  • The worth of an investment is $6774.50
  • The time period is 22 years.
  • The rate of interest is 2.7%.

Based on the above information, the calculation is as follows:

We know that

[tex]SI =P\times R\times T\\\\SI = P\times 2.7\% \times 22\\\\SI = 0.594P[/tex]

Now

Investment worth = P  + SI

= P + 0.594P

= 1.594P  

So,  

1.594P  = 6774.50

P  = $4,250  

Therefore we can conclude that the initial deposit amount is $4,250.00.

Learn more: brainly.com/question/13324776

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