Question

The formula for simple interest is I = Prt, where I is the interest earned, P is the principal, r is the interest rate and t is the number of years. Solve the formula for P in terms of r, I and t

Answer 1

To solve for the principal P using the simple interest formula I = Prt, rearrange the equation by dividing both sides by the product of the interest rate, r, and time, t, to get P = I / (rt).

Step-by-step explanation:

To solve for the principal P using the simple interest formula I = Prt, where I is the interest earned, P is the principal amount, r is the interest rate, and t is the time in years, follow these steps:

1. Start with the simple interest formula: I = Prt.
2. Rearrange the formula to solve for P: divide both sides by rt to isolate P, resulting in P = I / (rt).
3. Now, you have P expressed in terms of r, I, and t.

To see how it works with numbers, consider this example: If the interest earned I is $5, the interest rate r is 5% (or 0.05 as a decimal), and the time t is 1 year, then the principal P would be P = $5 / (0.05 × 1) which calculates to $100.