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How much should you invest at 5% simple interest in order to earn $100 interest in 12 months?​

Respuesta :

absor201

Answer:

You should invest $2000 at 5% simple interest in order to earn $100 interest in 12 months.

Step-by-step explanation:

Using the formula

[tex]I = Prt[/tex]

where

I = Interest earned

P = The principal (let say in $)

r = The Interest Rate

t = time

Given that

  • I = $100
  • r = 5%
  • t = 12 month = 1 year
  • P = The principal amount needed to invest (let say in $)

Thus,

[tex]I = Prt[/tex]

100 = P × 5% × 1

100 = P × 5/100 × 1

100 × 100 = P × 5

10000 = P × 5

P = 10000/5

  = 2000 (let say in $)

Thus, you should invest $2000 at 5% simple interest in order to earn $100 interest in 12 months.