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

$$ 2000$ $$2000$

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

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

Answer 2 · 2017-07-07T15:45:41

$P = $ 2000$ $P = $2000$

Simple interest can be calculated from the formula

$S I = \frac{P R T}{100}$ $SI = (color(blue)(P)RT)/100$

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

Changing the subject of the formula gives:

$P = \frac{100 \times S I}{R T}$ $color(blue)(P) = (100xxSI)/(RT)$

Substitute the values:

$P = \frac{100 \times 700}{14 \times 2.5}$ $color(blue)(P) = (100xx700)/(14 xx 2.5)$

$P = $ 2000$ $P = $2000$