Josephine invests a sum of money at 4% simple interest for a year. At the end of this time, she has earned $200 in interest. What was the original amount of money that she invested?
A: Since the interest rate is 4%, the amount paid after one year is I = 0.04 × P, where P is the amount of the original investment. Since I = $200, solving for P yields P=$200/.0.04 = $5,000.