|
Interest
January 20, 2004
Ann invested a certain sum of money in a bank that paid simple interest. The amount grew to $240 at the end of 2 years. She waited for another 3 years and got a final amount of $300. What was the principal amount that she invested at the beginning?
| (A) | $ 200 | | (B) | $ 150 | | (C) | $ 210 | | (D) | $ 175 | | (E) | Insufficient data |
Correct Answer Choice (A)
Solution:
The sum grew to $240 at the end of 2 years.
At the end of another 3 years, the sum grew to $300.
i.e. in 3 years, the sum grew by $60.
Therefore, each year, it grew by $20.
Sum at the end of 2 years = $240
Sum grew by $20 each year.
Hence, in the first 2 years, sum grew by 2 * 20 = $40.
Therefore, sum at the beginning of the period = Sum at the end of 2 years - $40= $240 - $40 = $200.
| 
