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a financial instrument pays 8% simple interest (based on the purchase value) and matures after 3 years. the instrument can be purchased at any price. an investor purchases the instrument for p dollars, and calculated that the total value of the investment (i.e. p plus interest earned) will be $2,000 at maturity. calculate p. round your answer to the nearest cent. do not round until you have calculated your final answer

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anthougo

The financial instrument's principal (purchase value) that pays 8% simple interest is $1,612.90.

How is the principal determined?

The principal is the purchase value (p) of the financial instrument.

The simple interest rate is 0.08 or 8%.  The total interest rate for 3 years will be 0.24 (0.08 x 3) or 24%.

The total simple interest amount for 3 years is 0.24p.

Since the amount after 3 years is $2,000, which consists of both principal and accumulated interest, we can equate that p + 0.24p = $2,000.

Simple interest rate = 8%

Purchase value = p

Maturity period = 3 years

Amount after 3 years (p + plus) = $2,000

Accumulated simple interest for 3 years = 0.24p (0.08p x 3)

p + (8%)(3)p = $2,000

p + 0.24p = 2,000

1.24p = 2,000

p = $1,612.90

Thus, the purchase value (principal) that amounted to $2,000 with accumulated interest is $1,612.90.

Learn more about simple interests at https://brainly.com/question/25793394

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