SUMMARY
Michael's investment in a savings account matured to $4,106.32 after 165 days, earning simple interest at a rate of 4.80% per annum. To find the initial investment, the formula p = s(1 + rt) was used incorrectly, leading to confusion between the variables p (final amount) and s (initial investment). The correct approach requires calculating the initial investment using the rearranged formula s = p / (1 + rt), resulting in an initial investment of approximately $4,000.00 and total interest earned of about $106.32.
PREREQUISITES
- Understanding of simple interest calculations
- Familiarity with the formula p = s(1 + rt)
- Basic knowledge of algebraic manipulation
- Ability to convert time from days to years for interest calculations
NEXT STEPS
- Practice solving simple interest problems using different rates and time periods
- Learn about compound interest and how it differs from simple interest
- Explore financial calculators that automate interest calculations
- Study the impact of varying interest rates on investment growth
USEFUL FOR
Students studying finance or mathematics, educators teaching financial literacy, and anyone interested in understanding investment growth through simple interest calculations.