Question

Principal, rate of simple interest, and amouFind the principal.Annual rate of interest = 11%Period=3 yearsTotal interest = 825 rupeesPrincipal =rupees

Answer 1

The compound interest formula is:

`A=P(1+(r)/(n))^(nt)`

Where 'A' represents the total interest, 'P' the principal, 'r' the rate of interest, 't' the time and 'n' the number of times the interest is compounded.

SInce we have an annual rate with no further information about how it is compounded, our n = 1.

From the question we get the following values:

`\begin{gathered} A=825 \\ r=0.11 \\ t=3 \end{gathered}`

Plugging those values in our equation, we have:

`\begin{gathered} 825=P(1+0.11)^3 \\ \end{gathered}`

Solving for P:

`P=(825)/((1+0.11)^3)=(825)/(1.11^3)=603.232889573\approx603`

With this, we have our principal equal to 603 rupees.