Madalyn wants to buy a 400 dollars stereo set in 9 months. How much should she invest at 3% simple interest to have the money then?
400 = S*1.0225 (.03/(9/12))
S = 400/1.0225
= 391.20
To calculate the amount Madalyn should invest at 3% simple interest to have $400 in 9 months, we can use the formula for simple interest:
Simple Interest = Principal × Rate × Time
In this case, Madalyn wants to have $400 in 9 months, and the interest rate is 3%. We need to solve for the principal amount.
Let's break down the information given:
Principal (amount invested) = ?
Rate = 3% or 0.03 (as a decimal)
Time = 9 months
Now we can substitute these values into the formula:
Simple Interest = Principal × Rate × Time
$400 = Principal × 0.03 × 9
To isolate the Principal, we divide both sides of the equation by (0.03 × 9):
$400 / (0.03 × 9) = Principal
Simplifying the equation:
$400 / 0.27 = Principal
$1481.48 ≈ Principal
Therefore, Madalyn should invest approximately $1481.48 at 3% simple interest to have $400 in 9 months.