Associated Topics || Dr. Math Home || Search Dr. Math

### Amount of Interest Earned in a Year

```
Date: 11/28/95 at 14:17:17
From: Anonymous
Subject: hard math

If Li Fong had earned one fourth of a percent more in annual interest
on an investment, the interest for one year would have been \$45 greater.
How much did she invest at the beginning of the year?
```

```
Date: 11/28/95 at 15:54:36
From: Doctor Ken
Subject: Re: hard math

Hello there!

I think that the hardest part of this question is figuring out the
equation you have to solve.  Essentially, that means translating the
words in the problem into mathematical symbols so that you can

One percent is 1/100, so 1/4 of 1 percent is 1/4 * 1/100 = .25 * .01
= .0025

So let X equal the amount of money Li Fong invested, and let P be the
percentage rate (something like 1.04 for 4% or something like that).
Then the first part of the equation is this:

X(P + .0025)

That's 1/4 of a percent more interest.  Then the whole phrase "the
interest for one year would have been" just means "=".  So we have

X(P + .0025) = XP + 45

because XP is the actual amount she ended up with at the end of a year,
and raising the interest would have made that \$45 more.  Now that you
have that equation, you can just solve for X!

Good luck.

-Doctor Ken,  The Geometry Forum

```
Associated Topics:
High School Interest

Search the Dr. Math Library:

 Find items containing (put spaces between keywords):   Click only once for faster results: [ Choose "whole words" when searching for a word like age.] all keywords, in any order at least one, that exact phrase parts of words whole words

Submit your own question to Dr. Math
Math Forum Home || Math Library || Quick Reference || Math Forum Search