Question

An amount of #550,000.00 was realised when a principal,x was saved 2% simple interest for 5 years. Find the value of x​

Answer 1

`\huge \boxed{{x=500,000}}`

Explanation:

`A=P(1+rt)`

`A` = amount ⇒ 550000

`P` = principal amount ⇒ x

`r` = rate ⇒ 2%

`t` = time ⇒ 5

`\displaystyle 550000=x(1+(2)/(100) (5))`

Solve for the brackets.

`\displaystyle 550000=(11)/(10)x`

Multiply both sides of the equation by
`(10)/(11)`.

`500000=x`

The value of x (principal amount) is 500,000.

Answer 2

£500,000.00

Explanation:

Principal = x

Saving rate = 2% PA simple

Time = 5 years

Final amount = £550,000

• x*(1+ 2*5/100) = 550,000
• x*(1 + 0.1) = 550.000
• 1.1x = 550,000
• x= 550,000/1.1
• x= 500,000

Principal amount is £500,000