Question

How much principal must be deposited to earn $2,179 in simple interest at a rate of 3 2/3% for 60 months

Answer 1

The principal to be deposited is $ 11874.6594

Solution:

Given is a simple interest problem

Principal = ?

Simple Interest = $ 2179

`Rate = 3(2)/(3) \% = (11)/(3) \% = 3.67 \%`

Number of years = 60 months =
`(60)/(12) = 5 \text{ years }`

The simple interest is given by formula:

`Simple\ Interest = (p * n * r)/(100)`

Where, "p" is the principal and "r" is the rate of interest and "n" is the number of years

`2179 = (p * 3.67 * 5)/(100)\\\\217900 = 18.35p\\\\p = (217900)/(18.35)\\\\p = 11874.6594`

Thus the principal to be deposited is $ 11874.6594