JAMB 2017 · UTME (set 2) · Q43

Find the principal which amounts to ₦5,500 at simple interest in 5 years at $2\%$ per annum.

Worked solution (try it first)

Simple interest for 5 years at $2\%$ is $5 \times 2\% = 10\%$ of the principal $P$ .
The amount is principal plus interest, so $1.1P = 5500$ .
Divide both sides by 1.1: $P = 5000$ .
The principal is ₦5,000, option B.