If you borrow $3,000 on an 8% discounted loan for 9 months, how much will you actually receive?

Mathematics · Middle School · Tue Nov 03 2020

Answered on

Given:

Principal Amount: $3,000

Discount loan rate = 8% or 0.08

Term = 9 months or ¾ year 

Determine the amount of money receive.

Simple Interest Formula:

I = Prt

Solution:

The discount is the total interest of the loan, hence we must first solve for the interest, using the formula for simple interest.

I = Prt

I = 3000(0.08)(¾)

I = $180

Subtract the discount to the principal amount.

= $3000 - $180

= $2820

Final answer:

=$2820