Question

What sum of money will produce 28600 as an interest in 3 years 3 months at 2.5 % p.a. simple intrest?

Answer 1

➠Question:-

What sum of money will produce $28600 as interest in 3 years and 3 months at 2.5% per year simple interest ? 

➠Solution:-

Formula for simple interest is

I = Pnr / 100

Here, I  =  $28600, r  =  2.5%

The value of "n" must always be in "years". But in the question, it is given in both years and months. 

To convert months into years, we have to divide the given months by 12.

3 years 3 months  =  3 3/12  years  or  3¼  years

So, the value of "n" is 3¼ or 13/4. 

Putting I  =  28600, r  =  2.5 and n  =  13/4 in the formula of simple interest.   

⇒ 28600  =  [P ⋅ 13/4 ⋅ 2.5] / 100

⇒ 2860000  =   P ⋅ 3.25 ⋅ 2.5

⇒ 2860000  =  P ⋅ 8.125

⇒ 2860000 / 8.125  =  P

⇒ 352000  =  P

So, the required principal is $352,000.