Question

An investment earn 6% simple interest. What amount of principal is need to have $3000 after 5 years

Answer 1

The amount of $1000 principal is needed to have $3000 after 5 years.

Explanation:

As the interest formula is

`I=Prt`

Where

• P is the principle

• r is the rate in decimal

• t is the time in years

Substituting the following values in the interest formula and solve for P

I=$3000

r = 6% = 6/100 =
`0.06`

t = 5

so the equation becomes

`I=Prt`

`3000=P\left(0.06\right)\left(5\right)`

switch both sides

`P\left(0.06\right)\left(5\right)=3000`

`P\left(0.3\right)=3000`

`P=10000` $

Therefore, the amount of $1000 principal is needed to have $3000 after 5 years.