Find the principal which amounts to N5,500 at a simple interest in 5 years at…

Find the principal which amounts to N5,500 at a simple interest in 5 years at 2% per annum.
  • A.
    N4,900
  • B.
    N5,000
  • C.
    N4,700
  • D.
    N4,800
Correct Answer: Option B
Explanation

Principal, P = Amount, A – Interest, I.
A = P + I
I = (P.T.R)/100 = (P x 5 x 2)/100 = 10P/100 = P/10
But A = P + I,
=> 5500 = P + (P/10)
=> 55000 = 10P + P
=> 55000 = 11P
Thus P = 55000/11 = N5,000

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