Question

After five years of earning interest at an annual rate of 4%, an investment has earned $1,200 in interest. Determine the amount of the initial investment. A full answer would be nice please!

Answer 1

Answer: Using the Interest equation I can do this:

I = P*r*t

1200 = P*0.04*5

To get the answer:

P = 1200/(0.2)

P = 12000/2 = $6000