Question

Tahmar knows the formula for simple interest is I = Prt, where I represents the simple interest on an amount of money, P, for t years at r rate. She transforms the equation to isolate P : P = P : P equals StartFraction I Over r t EndFraction.. Using this formula, what is the amount of money, P, that will generate $20 at a 5% interest rate over 5 years?

Answer 1

Given:

Tahmar knows the formula for simple interest is I = Prt, where I represents the simple interest on an amount of money, P, for t years at r rate

She transforms the equation to isolate P : P = P : P = $\frac{I}{rt}$

To find:

Using this formula, what is the amount of money, P, that will generate $20 at a 5% interest rate over 5 years?

Solution:

The simple interest generated after 5 years, I = $ 20

The rate of interest, r = 5% = $\frac{5}{100} = 0.5$

The no. of years, t = 5 years

"P" → is given as the amount of money

We are given the formula to find the value of P as:

$\boxed{\bold{P = \frac{I}{rt} }}$

Now, substituting the given values in the formula above, we get

$P = \frac{20}{0.5\times 5}$

$\implies P = \frac{20}{0.25}$

$\implies P = \frac{2000}{25}$

$\implies P = \frac{2\times 1000}{25}$

$\implies P = 2\times 40$

$\implies \bold{P = \ \:80}$

Thus, the amount of money, P is → $ 80.

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Answer 2

Answer:4

Step-by-step explanation: