Answer: Therefore, the principal amount needed to have $6000 after 7 years with an 8% simple interest rate is approximately $10,714.29.
Explanation:
To determine the principal amount needed to have $6000 after 7 years with an 8% simple interest rate, we can use the formula for calculating simple interest:
Simple Interest = Principal x Rate x Time
In this case, we know that the interest rate is 8% and the time is 7 years. We want to find the principal amount. Rearranging the formula, we get:
Principal = Simple Interest / (Rate x Time)
Substituting the given values into the formula:
Principal = $6000 / (0.08 x 7)
Principal = $6000 / 0.56
Principal = $10,714.29 (rounded to the nearest cent)