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The simple interest formula is / = Prt, where /
represents simple interest on an amount, P, for t years
at a rate of r, where r is expressed as a decimal.
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02:53:50
What is the amount of money, P, that will generate [tex]$40
in interest at a 10% interest rate over 5 years?
$[/tex]60
[tex]$80
$[/tex]90
$100
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Answer :

GinnyAnswer
Certainly! Let's solve this problem step by step using the simple interest formula.

The simple interest formula is given by:
[tex]\[ I = P \times r \times t \][/tex]

Where:
- [tex]\( I \)[/tex] is the interest
- [tex]\( P \)[/tex] is the principal amount
- [tex]\( r \)[/tex] is the interest rate (in decimal form)
- [tex]\( t \)[/tex] is the time in years

We are given the following values:
- Interest ([tex]\( I \)[/tex]) = [tex]$40 - Interest rate (\( r \)) = 10% = 0.1 (since 10% as a decimal is 0.1) - Time (\( t \)) = 5 years We need to find the principal amount (\( P \)). Rearranging the simple interest formula to solve for \( P \), we get: \[ P = \frac{I}{r \times t} \] Substitute the given values into the equation: \[ P = \frac{40}{0.1 \times 5} \] First, calculate the denominator: \[ 0.1 \times 5 = 0.5 \] Then, divide the interest by the calculated denominator: \[ P = \frac{40}{0.5} \] Finally, calculate the result: \[ P = 80 \] So, the principal amount (\( P \)) that will generate $[/tex]40 in interest at a 10% interest rate over 5 years is [tex]\(\$80\)[/tex].

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