Question

Clare borrowed money from her parents at 4.3% simple interest. At the end of 1 year, she owed a total of $1,140.00 in principal and interest. How much did she borrow?

a) $1,095.65

b) $1,100.00

c) $1,097.12

d) $1,104.50

Answer 1

To find out how much Clare borrowed, we need to use the formula for simple interest and solve for the principal. The principal is approximately $1,095.65.

Step-by-step explanation:

To find out how much Clare borrowed, we can set up the formula for simple interest. The formula is: Total amount = Principal + (Principal x Rate x Time). We know that the total amount at the end of 1 year is $1,140.00 and the interest rate is 4.3%. Let's substitute these values into the formula and solve for the principal:

1. $1,140.00 = Principal + (Principal x 0.043 x 1)
2. $1,140.00 = Principal + (0.043 x Principal)
3. $1,140.00 = Principal + (0.043)Principal
4. $1,140.00 = Principal + 0.043Principal
5. $1,140.00 = 1.043Principal

To isolate the principal, we divide both sides of the equation by 1.043:

1. Principal = $1,140.00 / 1.043

Using a calculator, we find that the principal is approximately $1,095.65. Therefore, the correct answer is a) $1,095.65.