Question

I wish to have $10,000 at the end of 8 yers in a bank offering a simple interest rate of 7.5% per year. How much should I deposit in the bank THIS IS URGENT! PLEASE ANSWER! I REALLY NEED HELP! :((( :c :'( *crys

Answer 1

You have to invest $6,250

Explanation:

very simple applying the simple interest formula which is

`A = P (1 + rt)`

Given data

A, final amount = $10,000

P, initial principal balance= ?

r, annual interest rate = 7.5%

t, time (in years)= 8 years

we can substitute our given data to find the principal needed.

`10000= P(1+0.075*8)\\\10000= P(1.6)\\\`

Divide both sides by 1.6 we have

`P= (10000)/(1.6) \\\P= 6250`

P= $6,250