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?

Answer 1

the principal is $1,000 and the interest is $550.   

Answer 2

Principal = $ 1,000

Interest = $ 550

Explanation:

Given,

The total amount of the loan = $ 1,000

Since, the amount of the loan is called principal amount of the loan,

Thus, principal amount of the loan is $ 1,000

Now, the amount she return = $ 1,550,

Hence, the interest she paid = amount returned - principal amount

= $ 1550 - $ 1000

= $ 550