C08https://www-awu.aleks.com/aleRATIOS, PROPORTIONS, AND PERCENTSFinding the principal, rate, or time of a simple interest loan or...Explanation75°FCloudyRyan invested in a savings bond for 6 years and was paid simple interest at an annual rate of 4%. The total interest that he earned was $2160. How much didhe invest?If necessary, refer to the list of financial formulas.I need help with this math problem.

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AliyanA533617 AliyanA533617 · Answer 1 · 2022-10-30T00:15:52+02:00

You know that every year Ryan earns 4% in interest on his initial investment.

So multiply that rate by the number of years:

[tex]4\%*6=24\%[/tex]

Now this means that in 6 years, Ryan receives a pay where the 24% of the pay interests and is equal to $2160, so the 100% of the payment will be:

[tex]\frac{2160*100\%}{24\%}=9000[/tex]

Ryan in 6 years receive $9000, now calculate the present value with the formula of simple interest:

[tex]Vp=\frac{Vf}{(1+i)^n}[/tex]

Where Vp is the present value, Vf future vale (9000), i is the rate (4%), and n is the number of periods (6)

Replace and solve:

[tex]Vp=\frac{9000}{(1+0.04)^6}=7112.831[/tex]

So the investment of Ryan was $7112.831