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John is planning for retirement and wants to have an interest income of $3000 a year.
How much must he invest for one year at 8% Interest?

A. 37,800
B. 37,500
C. 35,000

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Respuesta :

Lanuel

The amount of money that John must invest for one year is: B. 37,500.

Given the following data:

  • Interest rate = 8% = 0.08.
  • Simple interest = $3000.
  • Time = 1 year.

To determine the amount of money that John must invest for one year:

How to calculate simple interest.

Mathematically, simple interest is given by this formula:

[tex]I=PRT[/tex]

Where:

  • S.I is the simple interest.
  • P is the principal or starting amount.
  • R is the interest rate.
  • T is the time measured in years.

Substituting the given parameters into the formula, we have;

[tex]3000=P \times 0.08 \times 1\\\\3000=0.08P\\\\P=\frac{3000}{0.08}[/tex]

P = $37,500.

Read more on simple interest here: brainly.com/question/24341207

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