How do you use the formula to solve these problems: 5%, for 8 years and the final value is $3500?

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Answer 1 · 2017-07-29T03:46:05

Principal amount $=$.2,500$

Final Value $$.3500$
Number of Years $n=8$
Rate of Interest $r=5% = 0.05$
Principal amount $=p$
Interest amount $=I$
Final amount $p+I$

The formula to calculate Interest is $=pxxnxxr$

$pxxnxxr=I$

Add p to both sides. You get the final amount. Both sides are equal

$p+[pxxnxxr]=I + p$

In our problem $I + p =$3,500$

Now substitute all the known values in the equation.

$p+[pxx8xx0.05]=3500$
$p+0.4p=3500$
$1.4p=3500$
$p=3500/1.4=2500$

Principal amount $=$.2,500$