Given the formula I=PRT, IF P = 8000, R=0.6, AND T =1, WHAT IS The VALUE OF "I"

The value of I is 4800.

I = (8000)(0.6)(1) = 4800.

Investment problems usually involve simple annual interest (as opposed to compounded interest), using the interest formula I = Prt, where I stands for the interest on the original investment, P stands for the amount of the original investment (called the "principal"), r is the interest rate (expressed in decimal form), and t is the time.

For annual interest, the time t must be in years. If they give you a time of, say, nine months, you must first convert this to 9/12 = 3/4 = 0.75 years. Otherwise, you'll get the wrong answer.

Investment word problems are not generally terribly realistic; in "real life", interest is pretty much always compounded somehow, and investments are not generally all for whole numbers of years.

To learn more, see PurpleMath.com's "Investment" Word Problems.

Monday, March 21 2016