To find the amount of money \( P \) that will generate $20 at a 5% interest rate over 5 years, we can use the formula for simple interest, which is \( I = Prt \).
We want to isolate \( P \), so we rearrange the formula:
\[ P = \frac{I}{rt} \]
Here, \( I \) represents the simple interest ($20), \( r \) is the interest rate (5% or 0.05 in decimal), and \( t \) is the time period in years (5 years).
Now we can plug in the values:
- \( I = 20 \)
- \( r = 0.05 \)
- \( t = 5 \)
Now substituting these values into the formula gives:
\[ P = \frac{20}{0.05 \times 5} \]
Calculating the denominator:
\[ 0.05 \times 5 = 0.25 \]
Now substituting back into the equation:
\[ P = \frac{20}{0.25} \]
Calculating that gives:
\[ P = 80 \]
Thus, the amount of money \( P \) that will generate $20 at a 5% interest rate over 5 years is $80.