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An investment offers a simple interest of 8%. Mike invested $X in that investment. After 6 months, the value of Mike's investment was 5,500. What was the initial investment $X of Mike? a. $938.17 b. $5,285.04 O c. $220.00 O d. $5,288.46 O e. $901.51

An investment offers a simple interest of 8%. Mike invested $X in that investment. After 6 months, the value of Mike's investment was 5,500. What was the initial investment $X of Mike? a. $938.17 b. $5,285.04 O c. $220.00 O d. $5,288.46 O e. $901.51

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An investment offers a simple interest of 8%. Mike invested $X in that investment. After 6 months, the value of Mike's investment was 5,500. What was the initial investment $X of Mike? O a. $938.17 Ob. $5,285.04 Oc. $220.00 O d. $5,288.46 O e. $901.51
Transcribed Image Text:An investment offers a simple interest of 8%. Mike invested $X in that investment. After 6 months, the value of Mike's investment was 5,500. What was the initial investment $X of Mike? O a. $938.17 Ob. $5,285.04 Oc. $220.00 O d. $5,288.46 O e. $901.51
Expert Solution
Step 1 What is simple interest?

Simple interest is the type of interest where the interest is not accumulated or reinvested in the fund. It is calculated by multiplying the rate of interest with cash flow and time period.

Simple interest=Amount×r×t

r = rate 

t = time

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