Problema Solution
How much money should be invested at a simple interest rate of 5% that will grow to $25000 after 5 years.
Answer provided by our tutors
let
P = the principal amount of money to be invested
r = 0.05 or 5%
t = 5 years
A = $25,000
A = P(1 + rt)
25000 = P(1 + 0.05*5)
P(1 + 0.05*5) = 25000
by solving we find:
P = $20,000
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$20,000 should be invested.