Question

Mr. Johnson wants to use the interest from his High Savings Account to buy his next TV. The TV will cost $900. He would like his investment to grow over for two and a half years. If he has a rate of 3.5%, how much will he need to invest in order to cover the cost of the TV?

Answer 1

now, we're assuming the rate of 3.5% is for a simple interest account, so

`~~~~~~ \textit{Simple Interest Earned Amount} \\\\ A=P(1+rt)\qquad \begin{cases} A=\textit{accumulated amount}\dotfill & \$900\\ P=\textit{original amount deposited}\\ r=rate\to 3.5\%\to (3.5)/(100)\dotfill &0.035\\ t=years\dotfill &2.5 \end{cases} \\\\\\ 900=P[1+(0.035)(2.5)] \implies 900=P(1.0875) \\\\\\ \cfrac{900}{1.0875}=P\implies 827.59\approx P`