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11 votes
How much principal must be deposited to earn $744 simple interest in 3 years at an rate of 5.4%?

User Santoku
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1 Answer

16 votes
16 votes

Answer:

$4,592.59

Explanation:

The formula for simple interest is

I = Prt

where I is the interest earned if you deposit an amount P at a rate of r per year for t years. r is interest rate in % divided by 100 to convert to decimal

Given

I = $744

r = 5.4% = 5.4/100 = 0.054 per year

t = 3 years

we can plug in these values into the equation to get

744 = P x 0.054 x 3

744 = 0.162P

Dividing by 0.162 on both sides gives
744/0.162 = P

or

P = 744/0.162 = $4,592.59

User Askold Ilvento
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