Answer:
The amount of the initial investment is $ 6000.
Step-by-step explanation:
Given: After five years of earning interest at an annual rate of 4%, an investment has earned $1,200 in interest.
We have to find the amount of the initial investment.
We know,
[tex]\text{Simple interest}=p\times r\times t[/tex]
Where P is initial investment
r is rate of interest
t is time period.
Given : Simple interest = $ 1200
Rate = 4 % =0.04
Time = 5 years
Substitute, we get,
[tex]1200=P\times 0.04\times 5[/tex]
Solve for P, we have,
Divide both side by 0.04 × 5 , we have,
[tex]\frac{1200}{0.04\times 5}=P[/tex]
Simplify, we get ,
P = $ 6000
Thus, The amount of the initial investment is $ 6000.
