Question

The simple interest formula is I = Prt, where I represents simple interest on an amount, P, for t years at a rate of r, where r is expressed as a decimal. What is the amount of money, P, that will generate $40 in interest at a 10% interest rate over 5 years?

Answer 1

$80

Explanation:

From the question, we are given The simple interest formula as I = Prt,

where l = simple interest on an amount= $40

t= years=5years

at a rate r= 10%

The rate= 10/100= 0.1

Then since we are looking for P, we can make P subject of formula from this expression;

I = Prt

P=I/rt

P= 40/(0.1 ×5)

P= 40/0.5

P= 80

therefore, the amount of money p that is needed is $80