Question

Elsa took out a 2-year loan to buy a car at 6% simple interest rate. If she has to pay $264vin interest, how much principal did she borrow?

Answer 1

The Principal amount that Elsa borrowed for the car loan is $2200 .

Explanation:

Given as :

The time period for the car loan = t = 2 years

The rate of interest applied = r = 6% at simple interest

The interest amount = S.I = $264

Let The principal amount which Elsa borrowed = $p

Now, From simple interest method

Simple Interest =
`(\textrm principal* \textrm rate* \textrm time)/(100)`

Or, S.I =
`(\textrm p* \textrm r* \textrm t)/(100)`

Or, $264 =
`(\textrm p* \textrm 6* \textrm 2)/(100)`

Or, $264 × 100 = 12 × p

Or, p =
`(264* 100)/(12)`

∴ p = $2200

So, The principal she borrowed = p = $2200

Hence,The Principal amount that Elsa borrowed for the car loan is $2200 . Answer