SOLUTION: You want to buy a new camera for Christmas by saving $1,999 in only eight months. You purchase a certificate of deposit(CD) from your local bank that has a simply interest rate of

Question 1152737: You want to buy a new camera for Christmas by saving $1,999 in only eight months. You purchase a certificate of deposit(CD) from your local bank that has a simply interest rate of 6.09%. How much must you put into the CD in order to have your desire camera? Round answer UP to the nearest penny.
Thank you in advance.
SYL
Found 2 solutions by jim_thompson5910, MathTherapy:
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!

Answer: 1921.01 dollars

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Work Shown:

To calculate simple interest, we use this formula:
i = interest earned
P = principal = amount deposited or invested
r = interest rate in decimal form
t = time in years

If we add on the amount of interest earned (i) to the original principal (P), then we get the final amount in the account after t years

The total amount, after interest is added, is then equal to some value A
Therefore, a much more useful equation is

We have,
A = 1999 = desired target to save to
P = unknown, what we want to solve for
r = 0.0609, decimal form of 6.09%
t = 8/12 since 8 months = 8/12 years

Let's plug in the given values and solve for P

Plug in A = 1999, r = 0.0609, and t = 8/12

Use your calculator for this step

Add

Divide both sides by 1.0406

Simplify the right side

Use your calculator for this step. This value is approximate.

Flip both sides

Round up to nearest penny

-----------------------------

If you place $1,921.01 in a CD at 6.09% for 8 months, then you earn

amount earned in interest

So the total amount is

Or we can use the other equation we found

We get the same result either way, which confirms P = 1921.01 is correct.

Answer by MathTherapy(10552) (Show Source): You can put this solution on YOUR website!
You want to buy a new camera for Christmas by saving $1,999 in only eight months. You purchase a certificate of deposit(CD) from your local bank that has a simply interest rate of 6.09%. How much must you put into the CD in order to have your desire camera? Round answer UP to the nearest penny.
Thank you in advance.
SYL

Formula for future value of a single amount, based on SIMPLE INTEREST: ,
where: ($1,999, in this case)
P = Present Value or amount To be Invested/Deposited (Unknown, in this case)
T = Time, in years ()
R = Annual interest rate ($6.09%, or .069, in this case)
then becomes:
P, or Present Value or amount To be Invested/Deposited =
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