Question

How much money must you deposit in a simple interest account to earn $500 in interest in 5 years at 4% annual interest?​

Answer 1

$~~~~~~ \textit{Simple Interest Earned} \\\\ I = Prt\qquad \begin{cases} I=\textit{interest earned}\dotfill & \ 500\\ P=\textit{original amount deposited}\\ r=rate\to 4\%\to \frac{4}{100}\dotfill &0.04\\ t=years\dotfill &5 \end{cases} \\\\\\ 500=P(0.04)(5)\implies \cfrac{500}{(0.04)(5)}=P\implies 2500=P$