Simple interest: Harley invested in 7.5% account for 3 years

Cole1

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Mar 9, 2006
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This is probably simple but I cannot figure out the equation. Please help....

Harley has just invested money in an accout that pays 7.5% per year in simple interest. If he waits 3 years he will earn 1237.50 in interest. HOw much money does he have invested in the account?

When I take the 1237.50 and multiply by .925 and do that with the sum two more times I get a total of 979.42. To check my work and then worked back toward the total by multiplying by 1.075 three times. I do not get my original number!!

Someone please tell me what I am doing wrong. Thanks in advance for any help!!
 
Cole1 said:
Harley has just invested money in an accout that pays 7.5% per year in simple interest. If he waits 3 years he will earn 1237.50 in interest. HOw much money does he have invested in the account?
This is SIMPLE INTEREST.

The formula is this:

INTEREST = PRINCIPAL * rate * time

Principal is the amount invested

rate is the % expressed as decimal

time = number of years.

OK.....

you know that the interest earned is $1237.50

You know that the rate is 7;5%, or as a decimal, 0.075

You know that the time is 3 years.

What you DON'T know is the principal, or the amount that was invested. Let's call that p.

1237.50 = p*(0.075)*3

or,

1237.50 = 3(0.075)p

Can you finish now?
 
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