Question

I want to withdraw 400.00 for 9 years at 8%. How much do I need to deposit

Answer 1

The principal investment required to get a total amount, principal plus interest, of $400.00 from simple interest at a rate of 8% per year for 9 years is $232.56.

Explanation:

Given

• Total accrued Amount A = 400.00 (Let say $)

• Time period t = 9 years

• Interest rate r = 8% = 0.08

To determine

Principle P = ?

Using the formula

P = A / (1 + rt)

substituting A = 400.00, t = 9 and r = 0.08 in the formula

P = 400 / ( 1 + (0.08 × 9))

P = $232.56

Therefore, the principal investment required to get a total amount, principal plus interest, of $400.00 from simple interest at a rate of 8% per year for 9 years is $232.56.