+0  
 
0
124
2
avatar

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

Best Answer 

 #2
avatar
+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."

 Jan 29, 2019
edited by Guest  Jan 29, 2019
 #1
avatar
0

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
avatar
+1
Best Answer

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

12 Online Users

avatar