Question

Use the simple interest formula I = pet. Find the amount that needs to be invested at 8% per year for 10 years in order to earn $2000 in interest

Answer 1

Using the simple interest formula I = pet, where I is the interest, p is the principal, e is the interest rate, and t is the time, we can plug in the given values and solve for p.

I = pet 2000 = p * 0.08 * 10 2000 = 0.8p p = 2000 / 0.8 p = 2500

Therefore, the amount that needs to be invested at 8% per year for 10 years in order to earn $2000 in interest is $2500.

Explanation: