Question

Nate has an account that pays 2.76% simple interest per year and wants to accumulate $3,090 in interest from it over the next 15 years. How much money should Nate invest in this account to meet this goal?

a.

$1,279.26

b.

$4,369.26

c.

$4,373.77

d.

$7,463.77

Answer 1

The answer is D. $7,463.77

Answer 2

Answer: d. $7,463.77

Explanation:

The formula to calculate the simple interest is given by :-

`I=Prt`, where P is the principal amount , r is the rate of interest ( in decimal) and t is time ( in years). (1)

Given : Nate has an account that pays 2.76% simple interest per year and wants to accumulate $3,090 in interest from it over the next 15 years.

i.e. I= $3,090 ; r= 2.76% =0.0276 and t= 15 years

Then, from (1), we have

`3090=P*0.0276*15\\\\\Rightarrow\ P=(3090)/(0.0276*15)=7463.76811594\approx7463.77`

Hence, the amount of money Nate should invest in this account to meet this goal = $7,463.77