Question

How much will you need to invest at 2.5% to have earned $900 in interest in 5 years

Answer 1

7200 is the principal

needed

Answer 2

we need $7200 to earn $900 in 5 years.

Explanation:

Simple Interest formula:
`(PRT)/(100)` .......where p is principal, r is rate of interest, t is time

Using the formula:

`(p*2.5*5)/(100) =900`

`{p*2.5*5} =900*100`

`12.5p =90000`

`p = 90000/12.5`

`p=7200`