A 1year loan at 6% ended up costing $144 in simple interest . How much money was borrowed
Mathematics · High School · Tue Nov 03 2020
Answered on
Given:
Simple Interest Earned ( A ) = $144
Term ( t ) = 1
rate ( r ) = 6% or 0.06 (divided by 100)
Determine the principal amount.
Formula for Simple Interest:
A = P (1 + rt)
Solution:
In order to determine the principal amount we simply solve for P.
A = P ( 1 + rt )
144 = P ( 1 + (0.06)(1))
144 = P ( 1.06)
144/1.06 = P ( 1.06)/1.06
P = $135.85
Final answer:
The amount borrowed or the principal amount is $135.85.