Answer:
$851.06
Explanation:
The computation of the principal is shown below:
As we know that
Amount = Principle + Simple interest
Amount = Principle + (Principle × Rate × time)
So,
Principal = Amount ÷ 1 + Rate × time
= $1,000 ÷ (1 + 0.07 × 2.5)
= $1,000 ÷ 1.175
= $851.06
We applied the amount and the simple interest formula
