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# Interest rate

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after 8 years, sheila’s Account earned \$900 in interest. If the interest rate is 0.08 how much did Sheila initially invest

Jan 29, 2019

#2
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It all depends whether the \$900 interest was "simple interest" or " compounded interest"
1 - Simple interest:
Let the amount she invested 8 years =A

A x 0.08 x 8 years =\$900, solve for A
A = \$1,406.25 - what she invested 8 years ago at "simple interest"

2- Compounded interest
FV =PV + interest
A +900 =A x  {1.08}^8, solve for A
A =1,057.67 - This is what she invested if \$900 was "compounded."

Jan 29, 2019
edited by Guest  Jan 29, 2019

#1
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If y=C(1+r)^t, then just plug in the numbers.

Y=C(The original amount)*(1+r(The rate of intrest))^t(The amount of time)

y=900(1.08)^8

y=\$1665.84

Hope this helped!

Jan 29, 2019
#2
+1

It all depends whether the \$900 interest was "simple interest" or " compounded interest"
1 - Simple interest:
Let the amount she invested 8 years =A

A x 0.08 x 8 years =\$900, solve for A
A = \$1,406.25 - what she invested 8 years ago at "simple interest"

2- Compounded interest
FV =PV + interest
A +900 =A x  {1.08}^8, solve for A
A =1,057.67 - This is what she invested if \$900 was "compounded."

Guest Jan 29, 2019
edited by Guest  Jan 29, 2019