Question

Calculate the amount of money that was loaned at 4.00% per annum for 2 years if the simple interest charged was $1,240.00.

Answer 1

Given:-

Simple intrest is $1240. Rate is 4.00%. Time is 2 years.

To find:-

The principal amount.

The formula which relates Simple intrest, Rate, Time and Principal amount is,

`I=prt`

So from this the formula for p is,

`p=(I)/(rt)`

Subsituting the known values. we get,

`\begin{gathered} p=(I)/(rt) \\ p=(1240)/(0.04*2) \\ p=(1240)/(0.08) \\ p=(124000)/(8) \end{gathered}`

By simplifying the above equation. we get the value of p,

`\begin{gathered} p=(124000)/(8) \\ p=(31000)/(2) \\ p=15500 \end{gathered}`

So the principle amount value is 15500.