Question

# A private lender gives loan at 18% per year in simple interest. The borrower hands over £540 over a period of 3 years in interest. __________ is the amount given on loan.

- 1000
- 1542
- 1632
- 1750

Hint:

### Obtain the principal amount by substituting them in the simple interest formula.

## The correct answer is: 1000

### R= 18% = 0.18, I = £540, T=3 years, P=?

I = PTR

540 = P ×3 ×0.18

P = = £1000

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