Find the principal which amounts to ₦ 5,500 at a simple interest in 5 years…

Find the principal which amounts to ₦ 5,500 at a simple interest in 5 years at 2% per annum

Correct Answer: Option B

Explanation

Principal = P, Simple Interest = I, Amount = A
Amount = Principal + Simple Interest
I = (frac{PRT}{100})
R = rate, T = time
I = (frac{P times 5 times 2}{100})
I = (frac{10P}{100})
I = (frac{P}{10})
Amount A = P + I
5500 = P + (frac{P}{10})
Multiply through by 100
5500 = 10P + P
5500 = 11P
p = (frac{5500}{11})
p = ₦5000

There is an explanation video available below.