Question

17) After 8 years at 4% simple interest per year, your savings account earns interest of $80.00. What is the principal

Answer 1

Explanation:

We can use the simple interest formula to solve this problem. The formula is:

I = P * r * t

Where:

I = Interest earned

P = Principal (initial amount of money)

r = Interest rate per year (as a decimal)

t = Time (in years)

From the problem statement, we know that:

I = $80.00

r = 0.04 (4% as a decimal)

t = 8 years

Substituting these values into the formula, we get:

$80.00 = P * 0.04 * 8

Simplifying:

$80.00 = 0.32P

Dividing both sides by 0.32, we get:

P = $250.00

Therefore, the principal is $250.00.