Question

In the formula l=p+prt, what does l equal when p=500,r=20%, t=2

Answer 1

Just plug in 500 for p, 0.2 for r (because 20% is equivalent to 0.20), and 2 for t:


`I=p+prt\\I=(500)+(500)(0.2)(2)\\I=500+200\\I=700`

So, if you start with $500 and charge an interest rate of 20% for 2 years, you will gain $200 to get $700 in total.