Answer:
You have to invest $6,250
Step-by-step explanation:
very simple applying the simple interest formula which is
[tex]A = P (1 + rt)[/tex]
Given data
A, final amount
= $10,000
P, initial principal balance= ?
r, annual interest rate
= 7.5%
t, time (in years)= 8 years
we can substitute our given data to find the principal needed.
[tex]10000= P(1+0.075*8)\\\10000= P(1.6)\\\[/tex]
Divide both sides by 1.6 we have
[tex]P= \frac{10000}{1.6} \\\P= 6250[/tex]
P= $6,250
