Question

Money is invested in a savings account at 4.25% simple interest. After 1 year, there is $479.55 in the account. How much was originally invested?

Answer 1

What was the original deposit? If you do not know, then name it something.

Answer 2

i don't understand what your saying?

Answer 3

That's okay. It requires a little abstraction.

P = The Amount of Money Originally Invested.

Steve: How much money did you invest?
Robert: P. Why so you ask?

Once we have a name for it, and we can talk about it, it is much easier to build an equation.

"Money is invested in a savings account at 4.25% simple interest. After 1 year, there is $479.55 in the account. How much was originally invested?"

The standard formula for Simple Interest

I = Prt

We have
r = 4.25% = 0.0425,
t = 1, and
hmmm...what is that $479.55? That is the total in the account after one year. It has two pieces.

1) The Original Deposit and
2) Interest Earned

Add P to both sides of the equation.

P + I = P + Prt

Now we have P + I = 479.55.

substitute all the known values.

P + I = P + Prt

Substituting r = 0.0425

P + I = P + P(0.0425)t

Substituting t = 1

P + I = P + P(0.0425)(1)

Substituting P + I = 479.55

479.55 = P + P(0.0425)(1)

All we have left to do is solve for P. Can you do it?

Answer 4

Let's see what you got for P!

Answer 5

I follow you until the end equation, I don't know how to solve It?

Answer 6

@tkhunny

Answer 7

479.55 = P + P(0.0425)(1)

Simplify
479.55 = P + P(0.0425)

Distributive Property

479.55 = P(1 + 0.0425) = P(1.0425)

Division Property
479.55 / (1.0425) = P

How's that?

Answer 8

You do know that if you make me do all the work you have to work another problem for me so I can see if you are getting it!

Answer 9

Yes, thats fine, im studding for an exam so that would help alot

Answer 10

I Understand simplify and divide but on the distribute part I don't understand how you got there

Answer 11

@tkhunny

Answer 12

a(B+C) = aB + aC

It also works the other way.

aB + aC = a(B+C)

That's all it is.