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What principle would you need to invest to at a rate of 3% to earn 700$ in 4 months

User SeaDude
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1 Answer

5 votes

Final answer:

To earn $700 in 4 months at a 3% interest rate, you would need to invest approximately $625.00.

Step-by-step explanation:

To find the principle needed to invest at a rate of 3% to earn $700 in 4 months, we can use the formula:

Principle = Amount / (1 + (rate × time))

Substituting the given values into the formula:

Amount = $700

Rate = 0.03 (since 3% is equivalent to 0.03)

Time = 4 months

Principle = $700 / (1 + (0.03 × 4))

Principle = $700 / (1.12)

Principle ≈ $625.00

Therefore, you would need to invest approximately $625 to earn $700 in 4 months with a 3% interest rate.

User Kball
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