Question

The simple interest formula I equals p times r times t gives the interest earned on an investment of p dollars at interest rate r for a time of t years. How much does Hector need to invest at a rate of 2% in order to earn $25 interest in 3 years?

about $417

about $42

about $25

about $1.50

Answer 1

@Hannnnah we don't know how much, but let's call it x for now.
okay?

Answer 2

Okay

Answer 3

What we know is that x, after earning simple interest at 2% per year, after 3 years, is to become x+25, in other words, it would have earned 25 dollars more at the end of 3 years.

Answer 4

or actually, never mind that, your way seems different...

I = prt
Where I = the interest to be gained
p is the principal, or how much Hector needs to invest
t is time, the number of years which will pass
and finally
r is the rate of interest.

You're already given I, t, and r.
So solve for p.

Answer 5

How would I solve for P though?

Answer 6

Plug in the values.
\[\Large I = prt\]

Answer 7

For example, if I = 100, r = 0.02 and t = 5
Then...
\[\Large I = prt\]\[\Large 100 = p(0.02)(5)\]
Then solving for p gives us
\[\Large p = 1000\]

Answer 8

So 2%=p$25,3years?

Answer 9

I don't get any of the numbers or variables

Answer 10

We don't know what p is (yet) that's what we're supposed to find.

Answer 11

I is the interest you want to earn.
Judging from your problem, which value is I?

Answer 12

2% ?

Answer 13

Please read the problem very thoroughly and carefully.

Answer 14

Ohh $25

Answer 15

Yes.

Answer 16

Okay so whats next?

Answer 17

Read the example I gave.

Answer 18

Oh okay