Question

Practice solving and using literal equations.

Tahmar knows the formula for simple interest is I = Prt, where I represents the simple interest on an amount of
money, P. for t years at rrate. She transforms the equation to isolate P P = Using this formula, what is the
amount of money, P, that will generate $20 at a 5% interest rate over 5 years?
What’s the answer

Answer 1

Answer: principal = $16.00

Explanation:

P = A / (1 + rt)

P = 20 / (1+.05 x 5)

P = 20 / (1.25)

P = 16