A man borrowed a sum of money at a simple interest rate of 20% per annum. After 1 year, he paid a total of Kshs 850,000. How much did he borrow?

The interest rate ($R$) is $20\%$ per annum, which is 0.20 in decimal form.
The time period ($T$) is 1 year.
The total amount paid ($A$) after one year is Kshs 850,000.
We need to find the principal amount borrowed ($P$).

The formula for the total amount ($A$) after a certain time with simple interest is:

Where:
$A$ = Total amount
$P$ = Principal amount (initial amount borrowed)
$R$ = Annual interest rate (as a decimal)
$T$ = Time in years

To find $P$, divide the total amount by 1.20:

The man borrowed Kshs 708,333.33.

The amount borrowed was $\text{Kshs } 708,333.33$.