Answer:
The principal value is Rs.4266.75.
Step-by-step explanation:
Using compound interest formula,
Compound interest = Amount - Principal
Amount is given by, [tex]A=P(1+r)^t[/tex]
So, [tex]I+P=P(1+r)^t[/tex]
Where, P is the principal
I is the interest I=Rs.1222
r is the interest rate r=6.5%=0.065
t is the time t=4 years
Substitute the value in the formula,
[tex]1222+P=P(1+0.065)^4[/tex]
[tex]1222+P=P(1.065)^4[/tex]
[tex]1222+P=1.2864P[/tex]
[tex]1.2864P-P=1222[/tex]
[tex]0.2864P=1222[/tex]
[tex]P=\frac{1222}{0.2864}[/tex]
[tex]P=4266.75[/tex]
The principal value is Rs.4266.75.
