Question

Find the amount of the principal on a loan at 6% interest for 140 days if the interest was $253.15, using the exact interest method. (Round to the nearest whole dollar amount)

Answer 1

$11,000

Explanation:

Given that :

Time, t = 140 days = 140/365 = 0.3835years

Interest paid = 253.15

Interest % = 6%

Principal, p =?

Using the relation :

Interest = principal * rate * time

253.15 = p * 0.06 * (140/365)

253.15 = 0.0230136p

P = 253.15 / 0.0230136

P = 11000.017

Hence, the principal amount = $11,000