Luke inherited some money and invested it at at 6% simple interest. at the end of the year, the total amount of his original principle and the interest was $18,020. How much did luke originally invest?

Hi there! Thank you for the opportunity to help you with your question!

Simple interest means that your principal (original amount) grows at a rate of 6% every year. So if I invest an initial amount P, then at the end of the year I will have 6% more, that is

Total = P * (1+0.06)

In this case, I know my Total = 18,020. Plugging into the form:

18020 = P(1.06)

P = 18020/1.061

P = 17000

Just to check, 6% of 17000 is 1020. 17000 + 1020 = 18020, as stated.

Please let me know if you need any clarification. Always glad to help!

Oct 7th, 2015

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.