Question

Algebraically manipulating the formula 1 = Prt, find the principal (PV) deposited in a savings account which eamed $11,000 in interest at a simple interest rate of9.5% for 15 years to the nearest whole cent).$7,312.07$8,083.92$7,719.30$6,987.44None of these choices are correct.

Answer 1

First, write out the given datas

Interest I = $11,000

Rate R = 9.5%

Time T = 15 years

Principal P = ?

Next, use the Interest formula below, to find the Principal p.

$\begin{gathered} \text{I = }\frac{PRT}{100} \\ \text{Cross multiply and make P the subject of the relation.} \\ 100I\text{ = PRT} \\ \text{Divide through by RT to make P subject of the relation.} \\ \frac{100I}{RT}\text{ = }\frac{PRT}{RT} \\ P\text{ = }\frac{100I}{RT} \end{gathered}$

Next, substitute the value of I, T and R to find the Principal.

$\begin{gathered} \text{Therefore,} \\ P\text{ = }\frac{100\text{ x 11000}}{9.5\text{ x 15}} \\ P\text{ = }\frac{1100000}{142.5} \\ P\text{ = \ 7719.29} \end{gathered}$

Final answer:

P = $7719.3