Question

The simple interest formula i equals p times r times t gives the interest earned on an investment of p dollars at interest rate r for a time of t years. how much does hector need to invest at a rate of 2% in order to earn $25 interest in 3 years?

Answer 1

Assuming continuously compounding interest: A = Pe^(rt) A = Pe(0.02)(3) A = P(1.062) P would be about $417: A = (417)(1.062) = $442.85 $442.85 - $417 = $25.85