Find principal to the nearest dollar, rate to the nearest tenth of a percent, or time to the nearest day. Use banker's interest.
-ABF Freight Systems earned $420.00 interest in 210 days from an investment that paid 4%. Find the amount initially invested.
A)$182,500
B)$10,500
C)$9,000
D)$18,000

Question

Quizplus · Accepted Answer

To use banker's interest, we need to round the time to the nearest multiple of 30 (the assumed number of days in a month).

210 days rounded to the nearest multiple of 30 is 210, which means we can use the given time as is.

The interest earned is $420.00, and the interest rate is 4%. Let P be the principal (initially invested amount).

Using the formula for simple interest:

I = P * R * T

Where: 
I = Interest
P = Principal
R = Interest Rate
T = Time in years

Plugging in the given values:

$420.00 = P * 0.04 * (210/365)

Simplifying and solving for P:

P = $18,000

Therefore, the amount initially invested was $18,000, which is closest to choice letter D ($18,000).

Find Principal to the Nearest Dollar, Rate to the Nearest