Question

WhatisthemaximumamountofmoneyGingercanborrowtodayifitmustbepaidbackin22monthswithasimpleinterestat9%andsheknowsthatatthetimeshewillbeabletorepayno more than $23,00

Answer 1

Let's begin by listing out the information given to us:

time (t) = 22 months = 22/12, interest rate = 9% = 0.09, interest = $23

The formula for simple interest is given by:

`\begin{gathered} A=P(1+rt) \\ 23=P(1+0.09\cdot(22)/(12)) \\ 23=P(1+0.165) \\ 23=P(1.165)\Rightarrow P(1.165)=23 \\ P(1.165)=23 \\ P=(23)/(1.165)=19.74 \\ P=\text{ \$19.74} \end{gathered}`

Therefore, the maximum amount Ginger can borrow is $19.74