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?

• \\$60
• \\$80
• \\$90
• \\$100

Explanation:

Identify the given values and formula

We are given the simple interest formula:

$$I = Prt$$

From the problem statement, we identify the following values:

• Interest, \(I = 40\)
• Interest rate, \(r = 10\% = 0.10\)
• Time, \(t = 5\) years
• Principal amount, \(P\), is the target unknown.

Substitute the values into the formula

Using the Linear Equation Solving knowledge point

$$
LATEXBLOCK0
$$

Solve for the principal amount P

Using the Linear Equation Solving knowledge point

$$
LATEXBLOCK1
$$

The principal amount of money is \(\$80\).

Answer:

• (A) $60
• (B) $80 (Correct answer)
• (C) $90
• (D) $100