Mathematics

Question

trevor earned $826 on an account bearing 2.6 percent interest for 7 years

How much money did he invest? (p)

1 Answer

  • This is a simple interest formula computation.

    Given:
    Interest = 826
    Interest rate = 2.6%
    term = 7 years.

    The simple interest formula is:

    Interest = Principal * Interest rate * term

    To solve for the principal:
    Principal = Interest / (Interest rate * term)
    Principal = 826 / (2.6% * 7)
    Principal = 826 / 18.2%
    Principal = 4,538.46

    To check: Solve for the interest

    I = 4,538.46 * 2.6% * 7
    I = 117.999 * 7
    I = 825.993 rounded up to 826.
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