Question

Amy got a $1,000 loan from her bank, and she had to repay $1,550. What are the principal and interest amounts in this transaction?

principal is $1,000; interest is $1,550
principal is $1,550; interest is $550
principal is $1,000; interest is $550

Answer 1

C. principal is $1,000; interest is $550 :D

Answer 2

The correct option is C) Principal is $1,000; Interest is $550.

Explanation:

Consider the provided information.

Amy has $1000 loan from the bank and she repay $1550.

Principal amount refers to the initial size of a loan.

Here, Amy got a $1000 of loan initially. Thus, the principal amount is $1000.

The interest is the extra amount on repay.

Since, Amy repay $1550. Therefore, the extra amount she paid is:

$1550 - $1000 = $550

Thus the interest is $550.

Hence, the correct option is C) Principal is $1,000; Interest is $550.