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).

Guest Mar 12, 2018

#1**0 **

Best 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.**

Guest Mar 12, 2018