If the simple interest on a sum of money invested at 3% per annum for \(2\frac{1}{2}\) years is ₦123, find the principal.
Question 1 Report
If the simple interest on a sum of money invested at 3% per annum for \(2\frac{1}{2}\) years is ₦123, find the principal.
Answer Details
To find the principal, we need to use the formula for simple interest:
Simple Interest = (Principal * Rate * Time) / 100
where Rate is the interest rate, Time is the time period in years, and Principal is the amount of money invested.
In this case, the rate is 3%, the time is 2 years, and the simple interest is ₦123. We can plug these values into the formula and solve for the Principal:
₦123 = (Principal * 3 * 2) / 100
₦123 = (6 * Principal) / 100
₦123 * 100 = 6 * Principal
Principal = (₦123 * 100) / 6
Principal = ₦2050
Therefore, the principal is ₦2050. Answer (E) is not among the options provided. Among the given options, the closest answer to ₦2050 is option (C) ₦1,640.
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