Question

sam was charged $1050 in interest on a loan with a 2.5% interest rate. what was the original amount of the loan if he took 5 years to pay it back?

Answer 1

$8,400=amount of loan

Explanation:

Key:

P=Money borrowed

T=5 years (time passed)

R=0.025 (interest rate)

I=$1050 (interest charged)

Formula: I=P*R*T

Work:

1,050=P*0.025*5

1,050=P*0.125

1,050/0.125=8,400

Check

8,400*0.025*5=1,050

(thank you 7th grade math last year haha)