Question

Write an algebraic equation for the following problem and then solve it.

Heather and Chris borrowed $2000 at a simple interest rate of 5% for a period of 3 years. What was the interest?
Write an equation for the interest I earned.

a) I = P * r * t
b) I = P + r + t
c) I = P / (r * t)
d) I = P * (1 + r * t)

Answer 1

The algebraic equation to calculate the simple interest Heather and Chris will need to pay on a $2000 loan at 5% for 3 years is I = P * r * t, which simplifies to I = $2000 * 0.05 * 3, resulting in an interest of $300. The correct answer is a) I = P * r * t.

Step-by-step explanation:

The student asked to write an algebraic equation for calculating simple interest and then to solve it using the given information: Heather and Chris borrowed $2000 at a simple interest rate of 5% for a period of 3 years.

To determine the simple interest, the correct formula from the options provided is a) I = P * r * t, where I represents the interest, P is the principal amount ($2000), r is the annual interest rate expressed as a decimal (5% or 0.05), and t is the time the money is borrowed for in years (3 years).

Substituting the given values into the formula, we get:

I = $2000 * 0.05 * 3

I = $100 * 3

I = $300

Therefore, the total simple interest Heather and Chris will need to pay after 3 years is $300.