How much is the capital if the simple interest is Php 157.50 at 7% and if invested for 9 months?
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How much is the capital if the simple interest is Php 157.50 at 7% and if invested for 9 months?
Show your solution.
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Answer:
Problem:
You deposit some money into a bank account paying 7% simple interest per month. You received $157.5 in interest after 9 months. How much the deposit (principal) was?
Result:
The principal was $250.
Explanation:
STEP 1: Convert interest rate of 7% per month into rate per year.
STEP 2: Convert 9 months into years.
STEP 3: Find principal by using the formula , where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.
In this example I = $157.5, i = 84% and t = 0.75 years, so
I = P • i • t
P = ___I___
i • t
P = __157.5__
0.84.0.75
P = 250