If the simple interest on a certain sum for 3 years at 5% per annum is $150, wha

If the simple interest on a certain sum for 3 years at 5% per annum is $150, what is the principal amount?

If the simple interest on a certain sum for 3 years at 5% per annum is $150, what is the principal amount?

Step 1: Understand the formula for Simple Interest (SI), which is SI = PRT, where P is the principal amount, R is the rate of interest, and T is the time in years.
Step 2: Identify the values given in the question: SI = $150, R = 5% (which is 0.05 in decimal), and T = 3 years.
Step 3: Substitute the known values into the formula: 150 = P * 0.05 * 3.
Step 4: Simplify the equation: 150 = P * 0.15 (since 0.05 * 3 = 0.15).
Step 5: To find P, divide both sides of the equation by 0.15: P = 150 / 0.15.
Step 6: Calculate the value: P = 1000.

Simple Interest – The calculation of interest on a principal sum based on a fixed percentage over a specific period.
Principal Amount – The initial sum of money on which interest is calculated.
Interest Rate – The percentage at which interest is charged or paid on the principal.
Time Period – The duration for which the money is borrowed or invested, typically measured in years.