Question

What principal must be invested at an annual interest rate of 3% for 180 days to earn $35.75 interest?

A) $2248
B) $1192
C) $2383
D) $2416
E) $2220

Answer 1

To earn $35.75 interest at an annual interest rate of 3% for 180 days, the principal that must be invested is $2421.25.

Step-by-step explanation:

To calculate the principal amount that must be invested at an annual interest rate of 3% for 180 days to earn $35.75 interest, we can use the formula:

Principal = Interest / (Rate * Time)

Plugging in the given values, we get:

Principal = $35.75 / (0.03 * (180/365))

Principal = $35.75 / (0.03 * 0.493)

Principal = $35.75 / 0.01479

Principal = $2421.25

Therefore, the principal that must be invested is $2421.25.