June has a savings account with an annual simple interest rate of 2.6%. She hopes to gain $6,500 in interest over a period of eleven years. To accomplish this, June invested $17,801 in the account, but later realized that this was not enough money. To the nearest dollar, how much more money should June have initially invested to reach her goal?

Question

Popeye

Mathematics

23 February, 16:12

June has a savings account with an annual simple interest rate of 2.6%. She hopes to gain $6,500 in interest over a period of eleven years. To accomplish this, June invested $17,801 in the account, but later realized that this was not enough money. To the nearest dollar, how much more money should June have initially invested to reach her goal?

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Cassie Vang · Answer 1

Simple interest = Principal x rate x time

Principal = simple interest / (rate x time)

Here, simple interest = $6,500; rate = 2.6/100 = 0.026; time = 11years

Principal = 6500 / (0.026 x 11) = 6500/0.286 = 22,727

Therefore, she should have invested 22,727 - 17,801 = $4,626 more to achieve her goal.