Simple interest calculates interest on initial amount only. The investment by Hannah was : Option A: $4800
Suppose that the initial amount of investment is P
And the rate of simple interest is R% annually,
And the time of investment is T years.
Then, the amount of simple interest is calculated as:
[tex]I = \dfrac{P \times R \times T}{100}[/tex]
For the given case, let the initial investment Hannah made was of $P
Then, the time of investment is T = 8 years, R% = 4%, and given that Hannah earned interest I = $1536
Putting values in the above formula, we get;
[tex]I = \dfrac{P \times R \times T}{100}\\\\1536 = \dfrac{P \times 8 \times 4}{100}\\\\P = \dfrac{153600}{32} = 4800[/tex]
Thus,
The investment by Hannah was : Option A: $4800
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