Answer:
$300
Step-by-step explanation:
Simple interest is based on the principal amount of a loan or deposit, whereas compound interest is based on the principal amount and the interest that accumulates on it in every period.
Simple Interest = P x r x n
where P = Principal amount, r = Annual interest rate, n = Term of loan, in years
5% = 5 ÷ 100 = 0.05 so r = 0.05
Therefore,
Simple Interest = P x r x n:
60 = P x 0.05 x 4
60 = 0.2P
P = 60 ÷ 0.2 = 300
So the initial investment was $300.
