Simple Interest % help

1. Oct 18, 2017

lil.l3b91

1. The problem statement, all variables and given/known data

Karl invested his savings in a short-term fund that was offering a simple interest rate of 5% p.a. The maturity value of the investment at the end of 300 days was $29,152.08. a. Calculate the principal amount invested. Round to the nearest cent b. Calculate the interest earned during the period. Round to the nearest cent 2. Relevant equations p=I/rt I=prt 3. The attempt at a solution p=s(1+rt) p=29,152.08(1+0.05*300/365) Last edited: Oct 18, 2017 2. Oct 18, 2017 Mark44 Staff: Mentor No. The$29,152.08 is the amount at the end of the term, not the original investment amount.
You are missing an important relevant equation: A = P(1 + rt).
A is the amount that includes interest, and P is the amount that is invested at the beginning.

3. Oct 18, 2017

WWGD

Shouldn't there be an exponential there somewhere?

Last edited by a moderator: Oct 19, 2017
4. Oct 18, 2017

Ray Vickson

No: it is simple, not compound interest.

5. Oct 18, 2017

Staff: Mentor

The formula I wrote (above) is for simple interest.

6. Oct 18, 2017

Ray Vickson

Sorry: I thought I was replying to WWGD in Post #3, but somehow the system linked me to the wrong message.

7. Oct 18, 2017

Staff: Mentor

I suspected that was the case.

8. Oct 18, 2017