example 6: how much principal must be deposited to earn $1,000 simple interest in 2 years at a rate of 1.3%…

Explanation:

Step1: Recall simple - interest formula

The simple - interest formula is $I = Prt$, where $I$ is the interest, $P$ is the principal, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. We need to solve for $P$, so we can rewrite the formula as $P=\frac{I}{rt}$.

Step2: Convert the interest rate to decimal form

The annual interest rate $r = 1.3%=0.013$. The time $t = 2$ years and the interest $I=$1000$.

Step3: Substitute values into the formula

Substitute $I = 1000$, $r = 0.013$, and $t = 2$ into the formula $P=\frac{I}{rt}$. We get $P=\frac{1000}{0.013\times2}$.

Step4: Calculate the principal

First, calculate the denominator $0.013\times2 = 0.026$. Then, $P=\frac{1000}{0.026}\approx38461.54$.

Answer:

$38461.54$