Question

The equation a = (400)(0.053)(5) represents the amount of money earned on a simple interest savings account. What does the value 400 represent?

a. time
b. principal amount
c. interest rate
d. final amount

Answer 1

In the equation a = (400)(0.053)(5), the value 400 represents the b) principal amount. Hence, b) is correct.

Step-by-step explanation:

The value 400 in the equation a = (400)(0.053)(5) represents the principal amount.

In simple interest, the principal amount is the initial amount of money that is invested or earned interest upon. It is the starting point in calculating the total amount of money earned.

In this case, the formula is used to calculate the amount of money earned on a simple interest savings account, and 400 represents the principal amount in that account.