### Find the Principal in Simple Interest

Formula:

P = I / rt

where: P = principal, r = interest rate, I =simple interest, t = time period (in years)

Learn how to find the principal in simple interest with the following examples:

Question 1:

Calculate the principal that will earn $1,575 simple interest in 6 years at 7.5 percent per year.

Solution:

P = I / rt = 2300 / (0.075 * 6) = 1,575 / 0.45 = $3,500

Question 2:

A businessman borrowed an amount for 12 years at a rate of 3% per annum. The simple interest paid was $21,600. What was the amount borrowed?

Solution:

P = I / rt = 21,600 / (0.03 * 12) = 21,600 / 0.36 = $60,000

Thus, the amount borrowed (or principal) was $60,000.

* Next: How to Find Time in Simple Interest

P = I / rt

where: P = principal, r = interest rate, I =simple interest, t = time period (in years)

Learn how to find the principal in simple interest with the following examples:

Question 1:

Calculate the principal that will earn $1,575 simple interest in 6 years at 7.5 percent per year.

Solution:

P = I / rt = 2300 / (0.075 * 6) = 1,575 / 0.45 = $3,500

Question 2:

A businessman borrowed an amount for 12 years at a rate of 3% per annum. The simple interest paid was $21,600. What was the amount borrowed?

Solution:

P = I / rt = 21,600 / (0.03 * 12) = 21,600 / 0.36 = $60,000

Thus, the amount borrowed (or principal) was $60,000.

* Next: How to Find Time in Simple Interest

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