Question

Question 7489: Margaret's car loan statement said she would pay $6,589.80 in simple interest for a five-year loan at 8.4%. How much, in dollars, did Margaret borrow to buy the car?

A. $12,435.24

B. $15,678.10

C. $9,876.45

D. $10,000.00

Answer 1

Margaret borrowed $15,678.10 to buy the car.

Step-by-step explanation:

To solve this problem, we can first calculate the total amount of interest Margaret will pay over the course of the five-year loan. We can use the formula:

Interest = Principal x Rate x Time

Plugging in the given values, we have:

Interest = Principal x 0.084 x 5

Since we know that the total interest is $6,589.80, we can set up the equation:

6,589.80 = Principal x 0.084 x 5

Simplifying, we get:

Principal = 6,589.80 / (0.084 x 5)

Calculator the right-hand side of the equation to find:

Principal = $15,678.10

Therefore, Margaret borrowed $15,678.10 to buy the car. Answer choice B. $15,678.10 is correct.