Question

How much money must be deposited to earn $219 in simple interest in 8years at an annual rate of 6.2%? is the answer 108.62?

Answer 1

Given:

Amount earned = $219

Time = 8 years

Rate = 6.2 = 0.062

To find the principal amount earned, let's use the simple interest formula below:

`\text{Amount = }P(1\text{ + rt)}`

Where

r = rate

P = principal amount

t = time

Thus, we have:

`219\text{ = P(1 + }0.062\ast8)`
`219\text{ = P(}1.496)`
`219\text{ = 1.496P}`

Divide both sides by 1.496:

`\begin{gathered} (219)/(1.496)=(1.496P)/(P) \\ \\ 146.39\text{ = P} \end{gathered}`

Therefore the principal deposited is $146.39

ANSWER:

$146.39