Question

How much must be placed in a five month term deposit earning 4.4 simple interest in order to earn $480 interest

Ratios, rates, proportions
ANSWERED
asked 2020-11-10
How much must be placed in a five month term deposit earning 4.4 simple interest in order to earn $480 interest

Answers (1)

2020-11-11

Formula for Simple Interest is as follows - Simple Interest = \(\displaystyle{P}{X}{R}{X}\frac{{T}}{{100}}\) P = Principal Sum , R = Rate of Interest = 4.4 (in this case ) & T = Term during which the Principal Sum stays invested = 5 months ( in this case ) = \(\displaystyle\frac{{5}}{{12}}\) years So, the equation becomes - \(\displaystyle{480}={P}{X}{4.4}{X}\frac{{5}}{{{12}{X}{100}}}\)
So , \(P =( 480 \times 12 \times 100 ) / ( 4.4\times 5 )\)
So. P (Principal Sum ) = $ 26181.18

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