How much should you invest now at 7 1/4% simple annual interest in order to earn $190 interest in 4 months?
Accepted Solution
A:
Answer:so principal amount is $7862.07Step-by-step explanation:Given data rate = 7*1/4 % = 29/4 %interest = $190time = 4 months = 4/12 year to find out principal solutionwe know the simple interest formula i.e.interest = ( principal × rate × time ) /100 ..................1now put all value rate time and interest in equation 1 we get interest here interest = ( principal × rate × time ) /100 190 = ( principal × 29/4 × 4/12 ) /100 principal = 190 × 12 ×100 / 29principal = 7862.068966so principal amount is $7862.07