For simple interest accounts, the amount A accumulated or due depends on the principal p, interest rate r, and the time t in years according to the formula A = p(1 + rt). Find p given A = $1971.20, r = 16%, and t = 9 months. Round your answer to the nearest dollar.
A) $1760
B) $1765
C) $1770
D) $1775

Question

Quizplus · Accepted Answer

To find the principal $p$, we rearrange the formula to $p = \frac{A}{1 + rt}$. Given $A = \$1971.20$, $r = 0.16$ (since 16% = 0.16), and $t = \frac{9}{12}$ years (since 9 months is 9/12 of a year), we substitute these values into the formula to get $p = \frac{1971.20}{1 + 0.16 \times \frac{9}{12}}$. Calculating this gives $p \approx \$1760$, rounding to the nearest dollar.

For Simple Interest Accounts, the Amount a Accumulated or Due