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 = . Using this formula, what is the amount of money, P, that will generate $20 at a 5% interest rate over 5 years?

Answer 1

 $80

Working
Making p the subject gives:
P=$\frac{I}{rT}$
Substituting for values of I, r and t
p= $\frac{20}{0.05*5}$
p=80 dollars