it is a simple interest problem: the balance is $960, the rate is 4% and the length is 5 years -- what is the interest?

Answer 1

The formula we'll use for this is the simple interest formula, or:

I= P x R x T

Where:

P is the principal amount, $960.00.

r is the interest rate, 4% per year, or in decimal form, 4/100=0.04.

t is the time involved, 5....year(s) time periods.

So, t is 5....year time periods.

To find the simple interest, we multiply 960 × 0.04 × 5 to get that:

The interest is: $192.00

Usually now, the interest is added onto the principal to figure some new amount after 5 year(s),
or 960.00 + 192.00 = 1152.00. For example:

If you borrowed the $960.00, you would now owe $1152.00

If you loaned someone $960.00, you would now be due $1152.00

If owned something, like a $960.00 bond, it would be worth $1152.00 now.

Answer 2

No the balance not the principle. The principle and the interest are the two amounts we don't know. I know if you add the two together you get $960 but I can't figure out to get those two numbers.

Answer 3

i mean the balance after the interest is added is $960. how do i figure out the principle and the interest? The rate is 4% and the time is 5 years. Thanks!