The Amount

The addition of the principal and the interest for the period(i.e years) is called the amount at the end of that time. Therefore 

Amount = Principal + Interest

Example

Calculate the principal which amounts to #4970in 10 years at 4% per annum

Solution

Simple interest for 1year is 4% of principal

S.I for 10years = 10 × 4 = 40%

Amount = 100 + 40% of the principal

140% = 4970

Principal = \( \frac{100}{140} \scriptsize \; \times \; 4970 \)

Principal = #3550.00