Final answer:
To earn $30 in six years at a 5% interest rate, $100 must be invested as the principal.
Step-by-step explanation:
To calculate how much principal must be invested to earn $30 in six years at an interest rate of 5%, we can use the formula for simple interest:
Interest = Principal × rate × time
To find the principal (P), we rearrange the formula to solve for P:
P = Interest / (rate × time)
Let's plug in the values:
P = $30 / (0.05 × 6)
P = $30 / 0.3
P = $100
Therefore, the amount of principal that needs to be invested is $100.