An investment earning simple interest at a rate of 1.10% per annum for a term of 5 years earned $82.50 in interest. What was the principal?
I got 87.04
To find the principal, we can use the formula for simple interest:
Simple Interest = Principal x Rate x Time
Given:
Simple Interest = $82.50
Rate = 1.10% = 1.10/100 = 0.011 (in decimal form)
Time = 5 years
Let's substitute the given values into the formula and solve for the principal:
$82.50 = Principal x 0.011 x 5
Next, we simplify the equation:
$82.50 = Principal x 0.055
Now, divide both sides of the equation by 0.055 to isolate the principal:
Principal = $82.50 ÷ 0.055
Calculating the equation:
Principal ≈ $1,500
Therefore, the principal was approximately $1,500.