interest problem/investment problem

label Algebra
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

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? 

Oct 7th, 2015

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

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Oct 7th, 2015
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Oct 7th, 2015
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