Chapter 6.6, Problem 33HP

To determine

To find: Simple interest rate and Principal amount.

Answer to Problem 33HP

Therefore,

Principal amount and simple interest rate should be in the form

  $p=\frac{20}{r}$

To get simple interest of $80 in four years.

Explanation of Solution

Given information:

Simple interest $=I=\$80$

Time $=4$ years.

Concept:

  $I=prt$

Where

  $I=$ Simple interest.

  $p=$ Principal amount

  $t=$ time in years.

  $r=$ Annual interest rate.

Calculation:

From given information

Simple interest $=I=\$80$

Time $=4$ years.

On substituting values in above mentioned concept

We get

  $\begin{array}{l}I=prt\\ \Rightarrow 80=\left(p\right)\left(r\right)\left(4\right)\\ \Rightarrow 80=4pr\\ \Rightarrow pr=\frac{80}{4}\\ \Rightarrow pr=20\\ \Rightarrow p=\frac{20}{r}\end{array}$

Therefore,

Principal amount and simple interest rate should be in the form

  $p=\frac{20}{r}$

To get simple interest of $80 in four years.

Example:

Principal amount $=\$1000$

Interest rate = $2\%=0.02$

Given

Time $=t=4$

On substituting values

We get

  $\begin{array}{l}I=ptr\\ \Rightarrow I=\left(1000\right)\left(0.02\right)\left(4\right)\\ \Rightarrow I=\$80\end{array}$

Therefore,

Principal amount and simple interest rate should be in the form

  $p=\frac{20}{r}$

To get simple interest of $80 in four years.