Respuesta :
Answer: the amount she must invest is $1852
Step-by-step explanation:
The formula for determining simple interest is expressed as
I = PRT/100
Where
I represents interest paid on the amount invested.
P represents the principal or amount invested.
R represents interest rate
T represents the duration of the investment in years.
From the information given,
I = 2500 - P
R = 7%
T = 5 years
Therefore,
2500 - P = (P × 7 × 5)/100
2500 - P = 0.35P
0.35P + P = 2500
1.35P = 2500
P = 2500/1.35
P = 1852
Answer:
i.e. an amount of 1851.85 dollars should be put in this CD
Step-by-step explanation:
Given that a bank offers a CD that pays a simple interest rate of 7.0%
We have to find the amount that must you put in this CD now in order to have $2500 for a home-entertainment center in 5 years.
Here Principal + Interest after 5 years at rate of interest 7% should become = 2500
Simple interest for principal P for 5 years @7% = [tex]\frac{PTR}{100} \\=\frac{x35P}{100} \\=0.35P[/tex]
Total amount at the end of 5 years = P+0.35P = 1.35P
This must equal 2500
i.e.
[tex]1.35P =2500\\P = \frac{2500}{1.35} =1851.85[/tex]
i.e. an amount of 1851.85 dollars should be put in this CD
