Question

If interest is $145.62, time is 2 years, and the rate is 1.24%, what is the principal? (Round to the nearest hundredth place)

a) $11,747.98
b) $11,682.50
c) $11,812.46
d) $11,925.75

Answer 1

To find the principal, divide the interest by the rate multiplied by the time. The principal is $5,885.48.

Step-by-step explanation:

To find the principal, we can use the formula:

Principal = Interest / (Rate * Time)

Plugging in the given values:

Principal = $145.62 / (1.24% * 2 years)

Calculate the rate as a decimal:

1.24% = 1.24 / 100 = 0.0124

Principal = $145.62 / (0.0124 * 2 years) = $5,885.48

Rounding to the nearest hundredth:

The principal is $5,885.48