How much should you invest at 3% simple interest in order to earn $95 interest in 8 months?
I = PRT
95 = P * 0.03 * 0.66667
95 = 0.002P
47,500 = P
How much should you invest at 3.7% simple interest in order to earn $95 interest in 3 months?
To calculate how much you should invest at 3% simple interest in order to earn $95 interest in 8 months, you can use the formula for simple interest:
Interest = Principal * Rate * Time
In this case, the interest is $95, the rate is 3% (or 0.03), and the time is 8 months (or 8/12 = 2/3 years). Let's denote the principal as P.
95 = P * 0.03 * (2/3)
Simplifying the equation:
95 = P * 0.02
To isolate P and solve for the principal:
P = 95 / 0.02
P ≈ $4,750
Therefore, you should invest approximately $4,750 in order to earn $95 interest at 3% simple interest in 8 months.
To solve this problem, we can use the simple interest formula:
Interest = Principal * Rate * Time
where:
- Interest is the amount of interest earned,
- Principal is the amount you invest,
- Rate is the annual interest rate, and
- Time is the duration of the investment in years.
In this case, we want to find the Principal, so we rearrange the formula:
Principal = Interest / (Rate * Time)
Let's plug in the given values:
Interest = $95
Rate = 3% = 0.03 (expressed as a decimal)
Time = 8 months = 8/12 years (since the interest rate is expressed as an annual rate)
Principal = $95 / (0.03 * (8/12))
Simplifying this expression:
Principal = $95 / (0.03 * 2/3)
Principal = $95 / 0.02
Now, we can calculate the Principal:
Principal = $4,750
So, you should invest $4,750 at 3% simple interest to earn $95 in 8 months.