Question

In the formula I=P·r·t, what does P stand for? a. Percent: the interest rate expressed as a percentage b. Principal: the amount of money you initially invested c. Period: how often the interest is calculated d. Payout: how much money you end up with

Answer 1

b. Principal: the amount of money you initially invested

Answer 2

b. Principal: the amount of money you initially invested

Explanation:

We know that,

Simple interest on an amount is calculated by the formula,

`I=P.r.t`

Where, P is the principal amount that is invested initially,

r is the rate of interest per period,

t is the number of periods.

Hence, P in the given formula must stand for principal amount.

⇒ Option b would be correct.