Question

You wish to have $500 in a year. If you have a savings account that pays 6% simple interest, how much do you need to put into the account?

Answer 1

$8333.3

Explanation:

The problem here is to find the principal that will yield an interest of $500 in a year at a rate of 6%.

Interest =
`(PRT)/(100)`

P is the principal

R is the rate

T is the time

The time is 1 year;

500 =
`(P x 6 x 1)/(100)`

6P = 50000

P =
`(50000)/(6)` = $8333.3