When asked to solve A = P(1 + i) for i, one student answered i = A/P-1 and another student answered i = A-P/P . Are the two answers equivalent? (Explain your answer).
Solve for i:
A = P (i + 1)
A = (i + 1) P is equivalent to (i + 1) P = A:
P (i + 1) = A
Divide both sides by P:
i + 1 = A/P
Subtract 1 from both sides:
i = (A - P) / P OR i=A/P - P/P=A/P - 1. Yes, the two are equivalent!! The reason is very clear if you look at the last one.