How do you use the formula to solve these problems: 5%, for 8 years and the final value is $3500?
1 Answer
Jul 29, 2017
Principal amount
Explanation:
Final Value
Number of Years
Rate of Interest
Principal amount
Interest amount
Final amount
The formula to calculate Interest is
#pxxnxxr=I#
Add p to both sides. You get the final amount. Both sides are equal
#p+[pxxnxxr]=I + p#
In our problem
Now substitute all the known values in the equation.
#p+[pxx8xx0.05]=3500#
#p+0.4p=3500#
#1.4p=3500#
#p=3500/1.4=2500#
Principal amount