Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit? a. $2,524.50 b. $4,024.03 c. $4,250.00 d. $11,404.88

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Mathematics

Saul Huerta

28 February, 23:50

Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit? a. $2,524.50 b. $4,024.03 c. $4,250.00 d. $11,404.88

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Rafael Simmons · Answer 1

We have to calculate how big was Trevor's initial deposit if he has investment worth $6,774.50. The formula for the simple interest is: I = P * r * t and A = P + I, A = $6,774.50 (the final investment value), r = 0.027, t = 22 (years). 6,774.50 = P + P * 0.027 * 22; 6,774.5 = P + P * 0.594; 6,774.5 = 1.594 P; P = 6,774.50 : 1.594; P = 4,250. Answer: C. $4,250.00.