Question

You deposit $500 into a savings account that earns 7% simple interest for 10 years. What is the Principal? What is the rate and rate as decimal? What is Time?

Answer 1

The Principal is the amount you deposit at the start, so P= $500
The rate is 7%, as you will be earning 7% extra yearly in simple interest.
As a decimal, the rate is 0.07 - 7 PER CENT literally means per 100, so 7/100 is 0.07. However, when actually figuring out the simple interest, you have to add 1 to 0.07 because you are earning 7% ON TOP OF your original amount.
The time is 10, as you are leaving the money in the account for 10 years, and time is measured in the given unit
Now, let's plug in this information into the general formulas:
I=Prt
where I is the just the interest earned
I=500×0.07×10
I=$350

A=P(1+r/100×t)
where A is the total amount (original sum of money plus interest)
A=500(1+0.07×10)
A=$850