Question

Liam wants to put some money in a simple interest account.
It pays 6% interest annually for 2 years.
Liam would like to earn $750 in interest.

How much money does he need to put in?

Answer 1

explaination

$750 =2 years interest.

1 year = $7502=$375

$375 =6% of the amount

$3756=$62.50=1%

100%=$6250

Answer 2

He needs to put in $6250.

Tips:

If $P$ be the sum of money that yields interest $I$ in the rate of simple interest $r\%$ per year for $t$ years, then

• $P=\dfrac{100I}{tr}$

Step-by-step explanation:

Here,

• Interest (I) = $750
• Time of investment (t) = 2 years
• Rate of simple interest per year (r) = 6%

Then, the required sum of money (P)

= $\dfrac{100I}{tr}$

= $ $\dfrac{100\times 750}{2\times 6}$

= $ $\dfrac{75000}{12}$

= $6250