Find the principal and the interest amount Future Value (Maturity Value) $4526

Accounting Oct 20, 2020

Find the principal and the interest amount
Future Value (Maturity Value) $4526.25 Interest rate 3.5% Time 2 months.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed).

Expert Solution

Computation of the amount of principal:-

Future value - Principal = Principal * Rate * Time

$4,526.25 - Principal = Principal * 3.5% * 2 / 12

$4,526.25 - Principal = Principal * 0.005833

Principal + (Principal * 0.005833) = $4,526.25

1.005833 * Principal = $4,526.25

Principal = $4,526.25 / 1.005833

= $4,500

Interest amount = Future value - Principal

= $4,526.25 - $4,500

= $26.25

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