simple interest

classic Classic list List threaded Threaded
2 messages Options
Simple Interest Simple Interest
Reply | Threaded
Open this post in threaded view
|

simple interest

The ending balance on an investment is $1620.24.  If the principal was invested at 8% for 9 years, what was the principal?  
AlgebraHouse AlgebraHouse
Reply | Threaded
Open this post in threaded view
|

Re: simple interest

The formula for ending balance with simple interest is:
S = P(1 + rt)
where S = ending balance, P = principal, r = rate, t = time


1620.24 = P[1 + 0.08(9)]   {substituted 1620.24 for ending balance, 0.08 for rate, and 9 for time}
1620.24 = P(1 + 0.72)   {multiplied}
1620.24 = P(1.72)   {added inside parentheses}
P = 942   {divided each side by 1.72}

The principal was $942

- Algebra House