Question

The simple interest formula is I = Prt, where I represents simple interest on an amount, P, for t years at a rate of r, where r is expressed as a decimal.

What is the amount of money, P, that will generate $40 in interest at a 10% interest rate over 5 years?
a $60
b $80
c $90
d $100

Answer 1

b

Explanation:

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Answer 2

b $80

Explanation:

Interest = Principal x Interest Rate x Time

$40 = P x 0.1 x 5

$40 = 0.5 P

Dividing the equation by 0.5 we get;

P = $40 / 0.5

P = $80