If the simple interest on a sum of money is $300 in 5 years at a rate of 6% per

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Question: If the simple interest on a sum of money is $300 in 5 years at a rate of 6% per annum, what is the principal?

Options:

Correct Answer: $1200

Solution:

SI = (P * r * t) / 100. Thus, 300 = (P * 6 * 5) / 100. Therefore, P = (300 * 100) / (6 * 5) = $1000.

If the simple interest on a sum of money is $300 in 5 years at a rate of 6% per annum, what is the principal?

If the simple interest on a sum of money is $300 in 5 years at a rate of 6% per annum, what is the principal?

Step 1: Understand the formula for simple interest (SI), which is SI = (P * r * t) / 100.
Step 2: Identify the values given in the question: SI = $300, r = 6% per annum, and t = 5 years.
Step 3: Substitute the known values into the formula: 300 = (P * 6 * 5) / 100.
Step 4: Simplify the equation: Multiply both sides by 100 to eliminate the fraction: 300 * 100 = P * 6 * 5.
Step 5: Calculate the left side: 300 * 100 = 30000, so now we have 30000 = P * 30.
Step 6: Solve for P by dividing both sides by 30: P = 30000 / 30.
Step 7: Calculate the value of P: P = 1000.

Simple Interest – The calculation of interest on a principal amount over a specific period at a given rate.