Question In 25 years, a bond with a $$ 4.75 \% $$ annual interest rate earned $$ \$ 2,375 $$ as interest. What was the principal amount of the bond if the interest was calculated based on simple interest? Enter the answer as a whole dollar amount, no cents.

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UpStudy AI · Accepted Answer

Let the principal be $$ P $$. The simple interest formula is given by

$$
I = P \times r \times t
$$

We are given:
- Interest earned, $$ I = 2375 $$
- Annual interest rate, $$ r = 4.75\% = 0.0475 $$
- Time, $$ t = 25 $$ years

Substitute the known values into the formula:

$$
2375 = P \times 0.0475 \times 25
$$

Calculate the product of $$ r $$ and $$ t $$:

$$
0.0475 \times 25 = 1.1875
$$

Now the equation becomes:

$$
2375 = P \times 1.1875
$$

Solve for $$ P $$ by dividing both sides by $$ 1.1875 $$:

$$
P = \frac{2375}{1.1875}
$$

$$
P = 2000
$$

Thus, the principal amount is \$2000.
The principal amount of the bond was \$2000.

Question
In 25 years, a bond with a annual interest rate earned as interest. What was the principal amount of the bond
if the interest was calculated based on simple interest? Enter the answer as a whole dollar amount, no cents.

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Question In 25 years, a bond with a annual interest rate earned as interest. What was the principal amount of the bond if the interest was calculated based on simple interest? Enter the answer as a whole dollar amount, no cents.