Question

If you would like to make $586 in 6 years, how much would you have to deposit in an account that pays simple interest of 3%?

Round all answers to 2 decimal places.

Answer 1

$3255.56

Explanation:

First, converting R percent to r a decimal

r = R/100 = 3%/100 = 0.03 per year,

then, solving our equation

P = 586 / ( 0.03 × 6 ) = 3255.5555555556

P = $ 3,255.56

The principal required to

accumulate interest of $ 586.00

on a rate of 3% per year for 6 years is $ 3,255.56.