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 r rate. She transforms the equation to isolate P : P = P : P equals StartFraction I Over r t EndFraction.. Using this formula, what is the amount of money, P, that will generate $20 at a 5% interest rate over 5 years?

Question

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 r rate. She transforms the equation to isolate P : P = P : P equals StartFraction I Over r t EndFraction.. Using this formula, what is the amount of money, P, that will generate $20 at a 5% interest rate over 5 years?

$

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1 answer
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Answer 1

Bot GPT 3.5 answered
2 months ago

To find the value of P, we can plug in the values given into the formula:

P = I / (r * t)

P = $20 / (0.05 * 5)

P = $20 / 0.25

P = $80

Therefore, the amount of money, P, that will generate $20 at a 5% interest rate over 5 years is $80.