Question

East coast bank of america made a loan at 9.75% interest for 254 days. if the amount of interest was $270.50, use the exact interest method to find the amount of principal borrowed. (round to the nearest whole dollar amount)

Answer 1

$3,986.77

Explanation:

Data provided in the question:

Interest rate = 9.75% = 0.0975

Time = 254 days =
`(254)/(365)` = 0.6959

Amount of interest = $270.50

Now,

Interest Amount = Principle × Rate of interest × Time

or

$270.50 = Principle × 0.0975 × 0.6959

or

$270.50 = Principle × 0.06785

or

Principle = $3,986.77