How much would you need to deposit in an account now in order to have $3000 in the account in 10 years? Assume the account earns 5% simple interest. Round your answer to the nearest cent.


To determine how much you need to deposit now to have $3000 in the account in 10 years, given a 5% simple interest rate, we can use the formula for simple interest:

\[
A = P(1 + rt)
\]

Where:
- $ A $ is the amount in the future (final amount),
- $ P $ is the principal (initial deposit),
- $ r $ is the annual interest rate (as a decimal),
- $ t $ is the time in years.

Given:
- $ A = 3000 $,
- $ r = 0.05 $ (5%),
- $ t = 10 $ years.

Now, solve for $ P $:

\[
P = \frac{A}{1 + rt}
\]

Substitute the values:

\[
P = \frac{3000}{1 + (0.05 \times 10)} = \frac{3000}{1 + 0.5} = \frac{3000}{1.5}
\]

Now, calculate the principal:

\[
P = 2000
\]

So, you need to deposit **$2000** now in order to have $3000 in 10 years at 5% simple interest.

Would you like more details or have any questions?

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Here are 5 related questions:
1. What if the interest was compounded annually instead of simple interest?
2. How would the deposit change if the interest rate was 6% instead of 5%?
3. What if you wanted $5000 instead of $3000 in 10 years?
4. How does the time period affect the initial deposit required?
5. How does simple interest differ from compound interest in financial growth?

**Tip**: Simple interest grows linearly, whereas compound interest grows exponentially due to interest-on-interest accumulation.

How much would you need to deposit in an account now in order to have $3000 in the account in 10 years? Assume the account earns 5% simple interest. Round your answer to the nearest cent.

Learn how to calculate the amount you need to deposit now to have $3000 in 10 years at 5% simple interest. This step-by-step guide covers the simple interest formula and explains how to solve for the principal. Suitable for students in Grades 9-11.

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