A man took a loan from a bank at the rate of 12% per annum at simple interest. After 3 years he had to pay 5,400 as interest. The principal amount borrowed by him was?
Question
A man took a loan from a bank at the rate of 12% per annum at simple interest. After 3 years he had to pay 5,400 as interest. The principal amount borrowed by him was?
Solution
To find the principal amount borrowed by the man, we can use the formula for simple interest:
Simple Interest = (Principal * Rate * Time) / 100
Given that the rate of interest is 12% per annum and the interest paid after 3 years is 5,400, we can substitute these values into the formula:
5,400 = (Principal * 12 * 3) / 100
To solve for the principal amount, we can rearrange the equation:
Principal = (5,400 * 100) / (12 * 3)
Simplifying this expression, we get:
Principal = 15,000
Therefore, the principal amount borrowed by the man was 15,000.
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