Question

3. Alice took out a simple interest loan to purchase carpet for her house. The interest on the loan

was $1081.43. If the interest rate was 9.75% for 3 years, what was the price of the carpet?

Answer 1

The price of the carpet was
`\$3,697.20`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the Price of the carpet

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=3\ years\\ P=\$?\\ I=\$1,081.43\\r=0.0975`

substitute in the formula above

`1,081.43=P(0.0975*3)`

`1,081.43=P(0.2925)`

Solve for P

`P=1,081.43/(0.2925)`

`P=\$3,697.20`