# 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