Question

At the end of 8 years, Anna paid $400 interest for a loan. If the simple annual interest rate was 4%, how much did Anna borrow?

A. $1250
B. $1080
C. $864
D. $432

Answer 1

1250

Explanation:

Answer 2

$1250

Use the formula i = prt

In this case, we don't know P or Principal amount

i = 400

r = .04 *found by diving 4/100*

n = 8

Set formula to solve for P like: P= i/r(n)

P=400/.04(8)

P= 400/.32

P = 1250