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Topic Content:

  • 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 1.3.1:

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

Solution

Simple interest for 1 year is 4% of principal

S.I for 10 years = 10 × 4 = 40%

Amount = 100 + 40% of the principal

140% = 4970

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

Principal = ₦3550.00