Question

Use the simple interest formula to determine the missing value.

Answer 1

The principal value is $150.

We have the following values -

rate of interest - 4%

Time period = 6 months = 0.5 year

Simple interest = $36

We have to find the principal value.

What is the formula to calculate the Simple Interest for a Principal amount of $P at a rate of r% per annum for time of t years?

The simple interest can be calculated using the formula -

S.I. = $\frac{P\times r\times t}{100}$

The above expression can be written in terms of principal value as -

$P = \frac{100\times S.I.}{r\times t}$

We can use the above formula in the question given - Using the formula for principal value we get -

P = $\frac{100 \times36}{4\times 0.5}$

P = $\frac{3600}{2}$

P = $1800

Hence, the principal value is $150.

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