Question

How much principal must be deposited to earn $2,179 in simple interest at a rate of 3 2/3% for 60 months

Answer 1

The principal to be deposited is $ 11874.6594

Solution:

Given is a simple interest problem

Principal = ?

Simple Interest = $ 2179

$Rate = 3\frac{2}{3} \% = \frac{11}{3} \% = 3.67 \%$

Number of years = 60 months = $\frac{60}{12} = 5 \text{ years }$

The simple interest is given by formula:

$Simple\ Interest = \frac{p \times n \times r}{100}$

Where, "p" is the principal and "r" is the rate of interest and "n" is the number of years

$2179 = \frac{p \times 3.67 \times 5}{100}\\\\217900 = 18.35p\\\\p = \frac{217900}{18.35}\\\\p = 11874.6594$

Thus the principal to be deposited is $ 11874.6594