If the simple interest on a sum of money is $240 after 4 years at a rate of 6% p

If the simple interest on a sum of money is $240 after 4 years at a rate of 6% per annum, what is the principal?

If the simple interest on a sum of money is $240 after 4 years at a rate of 6% per annum, what is the principal?

Step 1: Understand the formula for simple interest, which is: Interest = (Principal * Rate * Time) / 100.
Step 2: Rearrange the formula to find the Principal: Principal = (Interest * 100) / (Rate * Time).
Step 3: Identify the values given in the question: Interest = $240, Rate = 6%, Time = 4 years.
Step 4: Substitute the values into the rearranged formula: Principal = (240 * 100) / (6 * 4).
Step 5: Calculate the denominator: 6 * 4 = 24.
Step 6: Calculate the numerator: 240 * 100 = 24000.
Step 7: Divide the numerator by the denominator: 24000 / 24 = 1000.
Step 8: Conclude that the Principal amount is $1000.

Simple Interest – Simple interest is calculated using the formula I = PRT, where I is the interest, P is the principal, R is the rate of interest per annum, and T is the time in years.