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29 January, 09:40

The formula for the future value V (in dollars) of an investment earning simple interest is V=p+prt, where p (in dollars) is the principal, r is the annual interest rate (in decimal form) and t is the time (in years).

a. Solve the formula for p

b. An investment earns 6% simple interest. What amount of principal is needed to have $3000 after 5 years? Round your answer to the nearest cent

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  1. 29 January, 12:46
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    a)

    V=p+prt

    now we solve for P

    V=P (1+rt)

    Divide both sides by (1+rt)

    P=V: (1+rt) ... answer

    b)

    P=V: (1+rt)

    P=3,000: (1+0.06*5)

    P=2,307.69
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