Question

Jermaine’s father owes $6,300 in interest at the end of a 60-month car loan at a 7% simple annual interest rate. What was the original loan amount?

Answer 1

I = Prt
6300 = P * .07 * (60/12)
6300 = .35P
6300 / .35 = P
18000 = P

$18,000 is the answer you are looking for! I hope this helps! :D

Answer 2

$18,000

Explanation:

It is given that the interest amount $6,300

We will calculate the principal amount.

So we use the formula

I = prt

P = Principal amount

r = rate of interest 7% ( 0.07 )

t = time in years 60 months (
`(60)/(12)` years )

6,300 = P × 0.07 ×
`(60)/(12)`

6,300 = P × 0.07 × 5

6,300 = 0.35P

`(6,300)/(0.35)` = P

P = $18000

The original loan amount was $18,000.