If a man earns $420 interest in one year at 7%, what was the amount of money invested?

Solution:

Given, interest = $420

Rate of interest = 7%

Number of years = 1

We have to find the amount of money invested.

We know,

Simple interest, I = Pnr/100

420 = P(1)(7)/100

P = (420)(100)/7

P = $6000

We know,

Compound interest, CI = P(1 + (r/100)ⁿ - P

420 = P(1+(7/100)¹ - P

420 = P(107/100) - P

420 = P(107 - 100)/100

7P = 420(100)

P = 42000/7

P = $6000

Therefore, the amount of money invested was $6000.

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If a man earns $420 interest in one year at 7%, what was the amount of money invested?

Summary:

If a man earns $420 interest in one year at 7%, the amount of money invested was $6000.