The principle amount will be equal to $100. The correct option is B.
What is simple interest?
The straightforward crediting of cash flows related to an investment or deposit is referred to as "simple" interest. Simple interest is calculated just on the loan's principal amount, whereas compound interest is calculated on both the principal and the cumulative interest.
Given that Imani earned $24 in interest after four years on an account that paid 6% simple interest annually.
The principle amount will be calculated by using the simple interest formula.
SI = ( P x R x T ) / 100
24 = ( P x 0.06 x 4 )
P = 24 / ( 0.06 x 4 )
P = $100
Therefore, the principle amount will be equal to $100. The correct option is B.
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