Respuesta :
The principal in this scenario is $ 8000 if Priscilla invested 20,000 at a rate of 12% over 5 years.
What is simple and compound interest?
Simple Interest can be defined as the sum paid back for using the borrowed money, over a fixed period of time.
Compound Interest can be defined as when the sum principal amount exceeds the due date for payment along with the rate of interest, for a period of time.
Formula. S.I. = (P × T × R) ⁄ 100
Given that:
Priscilla invested 20,000 that means the total amount she invested.
Amount= $ 20,000
Rate of interest=12%
Time= 5 year
Interest= $12,000.
By the formula
Amount = principal+ Interest
Principal=Amount-Interest
Principal= $ 20,000- $12,000
Principal=$ 8000
Therefore, the principal in this scenario is $ 8000.
Learn more about simple and compound interest here:
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