Question

Jaytakesouta11.5%simpleinterestloantodaythatwillberepaid6monthsfromnowwithapayoffamountof$9000.00.WhatamountisJayborrowing?

Answer 1

Given the formula for simple interest:

`A=P(1+rt)`

where A is the principal plus interest, P is the principal amount, r is the rate of interest and t is the time period.

In this case we have the following:

`\begin{gathered} A=9000 \\ r=0.115 \\ t=6 \\ \Rightarrow9000=P(1+6\cdot0.115) \\ \Rightarrow P=(9000)/(1.69)=5325.44 \\ P=5325.44 \end{gathered}`

Therefore, Jay is borrowing $5325.44