Math Is Fun Forum

box_____

Guest

Simple Interest Question

Tom makes an investment at 5% simple interest. At the end of one year, the total value of the investment is 1365$. How much was originally invested?

Is this answer correct:

Rate: 5%
Time: 1 year
Interest: 1365$

P=I/RT
P=1365/(0.05x1)
P=27300$?

Bob

Administrator

Registered: 2010-06-20

Posts: 10,643

Re: Simple Interest Question

hi box_____

Not quite.  Because 1365 is the total after interest has been added; not just the interest.

Let's say the original was x.

Then 5% is added = 0.05x

The new total is 1.05x and that's worth 1365.

So the equation to solve is 1.05x = 1365.

Bob

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