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Here is the problem: Simple interest on 2500 at 4 percent for 5 years.

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Principal 2500, simple interest at 4 percent per year for 5 years; the interest is unknown. Simple interest; P equals 2500, r equals 4 percent, t equals 5; solve for I.

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Read the problem. Principal 2500, simple interest at 4 percent per year for 5 years; the interest is unknown.

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Identify the known values. Simple interest. Known: P equals 2500, r equals 4 percent, t equals 5. Unknown: interest earned (I).

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Write the equation. I equals P times (r/100) times t.

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Solve for I. I equals 2500 times 0.04 times 5.

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Result. I equals 500.

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So the answer is Interest earned equals 500.

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Substitute the known values into I equals P times (r/100) times t and isolate I. Keep units consistent (for example miles, miles per hour and hours).

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Substituting I equals 500 back into I equals P times (r/100) times t balances both sides, which checks out.