How much principal must be deposited to earn $700 simple interest in 2.5 years at a rate of 14%?

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Answer 1 · 2017-07-07T15:33:31

$$2000$

The formula to find simple interest is $Prt=i$
$P=$ principle; $r=$ rate; $t=$ time in years; $i=$ interest

$P*0.14*2.5=700$
$P*0.35=700$
$P=$2000$

Answer 2 · 2017-07-07T15:45:41

$P = $2000$

Simple interest can be calculated from the formula

$SI = (color(blue)(P)RT)/100$

In this case are looking for the Principal $color(blue)(P)$ , but are given the values for Interest, Rate and Time.

Changing the subject of the formula gives:

$color(blue)(P) = (100xxSI)/(RT)$

Substitute the values:

$color(blue)(P) = (100xx700)/(14 xx 2.5)$

$P = $2000$