To find the amount of money invested (the principal), we can use the formula for simple interest, which is:
Interest = Principal × Rate × Time
In this case, we know:
- Interest = $420
- Rate = 7% = 0.07
- Time = 1 year
Now, we can rearrange the formula to solve for the principal:
Principal = Interest / (Rate × Time)
Plugging in the values:
Principal = $420 / (0.07 × 1)
Calculating that gives:
Principal = $420 / 0.07 = $6000
Therefore, the amount of money invested was $6000.