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. The equation solved for P is P = . What is the amount of money, P, that will generate $40 in interest at a 10% interest rate over 5 years? $60 $80 $90 $100

Answer 1

40=P x 10 x 5 / 100, use the solve function on the CAS calculator to find P

Answer 2

we know that

The simple interest formula is equal to

`I=Prt`

where

I represents simple interest

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=5\ years\\ P=?\\ I=\$40\\r=0.10`

`I=Prt`

Solve for P

`P=I/(rt)`

substitute the values

`P=40/(0.10*5)=\$80`

therefore

the answer is

`\$80`