Question

How much principal is needed to yield $900 in interest at 5% over 8 years?

Answer 1

The principal needed to yield $900 in interest at 5% over 8 years is $2250.

Step-by-step explanation:

To calculate the principal required to yield $900 in interest at 5% over 8 years, we can use the formula:

1. Interest = Principal × Rate × Time
2. $900 = Principal × 0.05 × 8
3. Divide both sides of the equation by (0.05 × 8) to isolate Principal
4. Principal = $900 / (0.05 × 8)
5. Principal = $2250

Therefore, the principal needed to yield $900 in interest at 5% over 8 years is $2250.