Question

How much money would i need to invest for six years at 4 ¼% simple interest to earn 400.00 kina?

Answer 1

1568.63

Explanation:

We have that the simple inteters formula is the following:

`I=Prt`

Where I is the interest earned, P is the principal, that is, the amount invested, r the rate and t the time. We substitute and calculate for P, like this:

`\begin{gathered} r=4(1)/(4)\text{\%}=4.25\text{\%}=(4.25)/(100)=0.0425 \\ t=6 \\ I=400 \\ \text{ replacing} \\ 400=P\cdot0.0425\cdot6 \\ P=(400)/(6\cdot0.425) \\ P=1568.63 \end{gathered}`

Therefore, for a profit of 400 under these conditions, 1568.63 must be invested