Question

1. A finance company charges $55 simple interest on a sum of money which is
borrowed for five months. Given that the rate
of interest is 12% per annum, find the sum of
the money.

Options:
1) $1200
2) $1100

Answer 1

Answer:

$1100 approx

Step-by-step explanation:

Given data

SImple interest = $55

Time= 5 months in years = 5/12= 0.42 years

rate= 12%

Let the sum be P, that is the principal

The expression for the interest is given as

SI=PRT/100

substitute

55= P*12*0.42/100

Cross multiply

5500=5.04P

P= 5500/5.04

P= 1091.2

Hence the Principal is $1100 approx