Question

A = principal + interest earned

or

2000 = p + p*r*t

For this discussion, choose a dollar amount, A, to be the balance of your savings account that you hope to have earned. Then you will choose values for two of the three other variables depending on the first letter of your last name.

If your last name begins with the letter A-H:

Choose your principal and time and solve for the rate.

Answer 1

Let's say I choose A = $5,000 as the balance of my savings account that I hope to have earned.

Now, I'll choose the values for the other two variables:

Principal (P) = $4,000 (I've chosen this value)
Time (T) = 3 years (I've chosen this value)

Now, I'll solve for the rate (R) using the formula:

A = P + P * R * T

$5,000 = $4,000 + $4,000 * R * 3

Now, we'll solve for R:

$5,000 - $4,000 = $4,000 * R * 3

$1,000 = $12,000 * R

R = $1,000 / $12,000

R ≈ 0.0833

So, the rate (R) is approximately 0.0833, or 8.33% when expressed as a percentage.