To answer this we have to apply the simple interest formula:
I =P x r x t
Where:
I= interest
P= Principal
R= Interest rate ( in decimal form)
t = time (years)
Replacing with the values given:
Interest= I
Principal = ?
Interest rate = 2/100 =0.02
time= 5 years
I = P x 0.02 x 5
I= 0.1P
Amount= P+I
A = P+0.1P
5,000= P+0.1P
5,000= 1.1P
5,000/1.1 =P
4,545.45 =P
