Question

Find the principal rounded to the nearest cent given:Rate: 9.5%Time (in days): 120Interest: $186

Answer 1

`\$5,955.26`

Step-by-step explanation

To find the principal, we have to apply the formula for simple interest:

`I=(P\cdot R\cdot T)/(100)`

where I = interest, P = principal, R = rate, T = time (in years)

We have to solve for P:

`\begin{gathered} 186=(P\cdot9.5\cdot(120)/(365))/(100) \\ \Rightarrow186=(P\cdot9.5\cdot120)/(365\cdot100) \end{gathered}`

Solving for P, we have:

`\begin{gathered} P=(186\cdot365\cdot100)/(9.5\cdot120) \\ P=(6789000)/(1140) \\ P=\$5,955.26 \end{gathered}`

That is the principal.