Final answer:
To earn $75 monthly at a 5% interest rate, one would need to invest $18,000, calculated using the simple interest formula I = PRT.
Step-by-step explanation:
To calculate the amount one would need to invest at a 5% interest rate to earn $75 per month, you would use the formula for simple interest. Since interest rates are typically given on an annual basis, we first find the annual interest which is $75 × 12 = $900. The formula for simple interest is I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time period in years. We are looking for P when I is $900, R is 5% (or 0.05), and T is 1 year.
P = I / (RT)
So, P = $900 / (0.05 × 1), which gives us P = $18,000. Therefore, to earn $75 per month at a 5% interest rate, one would need to invest $18,000.