Question

Money is borrowed at 14% simple interest. After one year, $1249.44 pays off the loan. How much was originally borrowed? I got $1096 for the amount of the original loan, but I'm not sure if to right.

Answer 1

The formula is
A=p (1+rt)
A future value 1249.22
P present value ?
R interest rate 0.14
T time 1 year
We need to solve for p
P=A÷(1+rt)
P=1,249.22÷(1+0.14×1)
P=1,095.81 round your answer
P=1096

Hope it helps