Question

If you earn $195 in

interest by having
money in a saviplas
account for 5 years
at 4%, how much
principal did you start
with

Answer 1

The principal is $975.

Step-by-step explanation:

As per given question we have provided that :

• ➣ Interest = $195
• ➣ Rate = 4%
• ➣ Time = 5 years

Here's the required formula to find the Principal :

`{\longrightarrow{\pmb{\tt{I= (PRT)/(100)}}}}`

• ↝ I = Interest
• ↝ P = Principal
• ↝ R = Rate
• ↝ T = Time

Substituting all the given values in the formula to find the Principal :

`{\implies{\sf{I= (PRT)/(100)}}}`

`{\implies{\sf{195= (P * 4 * 5)/(100)}}}`

`{\implies{\sf{195= (P * 20)/(100)}}}`

`{\implies{\sf{195= (20P)/(100)}}}`

`{\implies{\sf{P = 195 * (100)/(20)}}}`

`{\implies{\sf{P = 195 * \frac{\cancel{100}}{\cancel{20}}}}}`

`{\implies{\sf{P = 195 * 5}}}`

`{\implies{\sf{\underline{\underline{P = \$975}}}}}`

Hence, the principal is $975.

`\rule{300}{2.5}`

Answer 2

Principal = $975

Explanation:

Formula for interest is;

I = PRT/100

Where;

P is principal

R is interest rate

T is time

We are given;

I = $195

R = 4%

T = 5 years

Thus, making P the subject of the formula, we have;

P = 100I/RT

P = (100 * 195)/(4 * 5)

P = $975