To find the principal, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A is the final amount after interest has compounded for a given number of years
- P is the principal (initial amount)
- r is the interest rate (as a decimal)
- n is the number of times interest is compounded per year
- t is the number of years
In this case, the interest is compounded annually (n = 1), the interest rate is 5% (r = 0.05), the time period is 7 years (t = 7), and we want to find the principal (P).
We can rearrange the formula to solve for P:
P = A / (1 + r/n)^(nt)
Substituting the known values, we have:
P = 29,795 / (1 + 0.05/1)^(1*7)
P = 29,795 / (1 + 0.05)^7
P = 29,795 / (1.05)^7
P ≈ 21,000.00
Therefore, the principal that earns an interest of #29,795 in 7 years at a rate of 5% per annum is approximately #21,000.
Hence find the principal which earns an interest of #29 7950 in 7years at a rate of 5% per annum
1 answer