Question

When given a rate of 8% and a time of 2 years and an interest earned of $108, what is the principal and the new balance?

Answer 1

Answer:

Principal Value = $93.103

New Balance = $201.103

Step-by-step explanation:

Given:

Rate=R = 8%

Time =t= 2 years

Money earned = $108

To Find:

Principal interest = ?

New balance = ?

Solution:

The formula for Interest is

A = P(1+rt)

here A = $108, r= R/100 = 8/100 and t= 2

To Find

P=?

Now we have all values putting them in the formula we get

108 = P($1+\frac{8}{100}*2$)

108=P($1+\frac{8}{50}$)

taking LCM and solving

108=P($\frac{50+8}{50}$)

108=P($\frac{58}{50}$)

Multiplying both sides by $\frac{50}{58}$ we get

$108*\frac{50}{58}=P(\frac{58}{50}*\frac{50}{58}$)

we will get

P$=108*\frac{50}{58}$

P$=\frac{5400}{58}$

We get

P = $93.103

so Principal Value is $93.103

Now

New balance = Principal value + Interest earned

                      = 93.103 + 108

                      = $201.103

New Balance = $201.103