Question

Interest rate 6.5%, time 18 months, simple interest $828.75 what is the principal

Answer 1

Use the formula for simple interest:

i = p*r*t

Then i = ($828.75)(0.065)(1.5)
= $80.80

6.5% must be converted to a decimal fraction: 0.065, and 18 months to years, specifically 1.5 years.

Answer 2

The principal is $8500.

Explanation:

The simple interest formula is given by:

`E = P*I*t`

In which E is the interest, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time, in years.

In this problem, we have that:

`E = 828.75, I = 0.065, t = 1.5`

`E = P*I*t`

`828.75 = 1.5*0.065P`

`P = 8500`

The principal is $8500.