Question

Jamie just paid off a loan he took out six months ago at 12% simple annual interest. He paid $3,816.00, which was the sum of the principal and the simple interest accrued over the length of the loan. What was the amount of principal he borrowed? Give answer in dollars rounded to the nearest cent. Do NOT enter "$" sign in answer

Answer 1

The amount of principal Jamie borrowed was $3600.

Explanation:

Let the principal of loan is = Po

`P=Po*0.12*0.5`

Here r = 12% or 0.12

t = 6 months or 0.5 years

Now as given : Po+Interest=3816

`Po+0.06Po=3816`

`=>1.06Po=3816`

So, Po=3600

Hence, the amount of principal Jamie borrowed was $3600.