Question

How much should you invest at 2.8% simple interest in order to earn $55 interest in 14 months?

Answer 1

Remember that

The simple interest formula is equal to

$I=P\mleft(rt\mright)$

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

I=$55

r=2.8%=2.8/100=0.028

t=14/12=7/6 years

substitute given values

$55=P\mleft(0.028\cdot\frac{7}{6}\mright)$

solve for P

P=$1,683.67