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Homework Help: Simple Interest % help

  1. Oct 18, 2017 #1
    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. jcsd
  3. Oct 18, 2017 #2

    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.
     
  4. Oct 18, 2017 #3

    WWGD

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    Shouldn't there be an exponential there somewhere?
     
    Last edited by a moderator: Oct 19, 2017
  5. Oct 18, 2017 #4

    Ray Vickson

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    No: it is simple, not compound interest.
     
  6. Oct 18, 2017 #5

    Mark44

    Staff: Mentor

    The formula I wrote (above) is for simple interest.
     
  7. Oct 18, 2017 #6

    Ray Vickson

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    Sorry: I thought I was replying to WWGD in Post #3, but somehow the system linked me to the wrong message.
     
  8. Oct 18, 2017 #7

    Mark44

    Staff: Mentor

    I suspected that was the case.
     
  9. Oct 18, 2017 #8

    WWGD

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    Yes, my bad, I misread.
     
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