Question

6. For the simple interest loan whose terms are given below, find the principal required to reach the given future value at the end of the specified time.Future value:$8500Interest rate:5.2%Time:4 yearsPrincipal: $

Answer 1

Given,

Future value is $8500

Interest rate: 5.2%.

Time: 4years.

Let the principal amount be P.

Now,

`\begin{gathered} 8500-P=(P*4*5.2)/(100) \\ 8500-P=0.208P \\ 1.208P=8500 \\ P=(8500)/(1.208) \\ P=7036.4 \end{gathered}`

Hence, the principal is $7036.4