Question

The formula for the future value VV (in dollars) of an investment earning simple interest is V=p+prtV=p+prt, where pp (in dollars) is the principal, rr is the annual interest rate (in decimal form) and tt is the time (in years).

a. Solve the formula for p.
p=[]

b. An investment earns 8% simple interest. What amount of principal is needed to have $6000 after 7 years? Round your answer to the nearest cent.

Amount of principal: $[]

a. p=V/rt+1
b.?????

Answer 1

The given expression is

`V = p + prt`

And we have to solve for p .

And for that, first we take out p common from right side, that is

`V = p(1+rt)`

Now we need to isolate p by getting rid of 1 +rt, by dividing both sides by 1+rt, that is

`p = (V)/(1+rt)`

b.Substituting the given values of V, r and t, we will get

`P = (6000)/(1+ 0.08*7) =$3846.15`