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Whitney loaned her friend some money. The interest was $72 after one year at a rate of 8% How much did she loan her friend?

User Nsr
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Final answer:

To find the principal amount Whitney loaned, we use the formula for simple interest and solve for the principal, which results in a loan amount of $900.

Step-by-step explanation:

The question asks us to calculate the principal amount of a loan based on the given interest amount, the interest rate, and the time period the interest was accumulated. To find the principal amount Whitney loaned to her friend, we need to use the formula for calculating simple interest: Interest = Principal × rate × time. We are given that the interest is $72, the rate is 8% per year (or 0.08 as a decimal), and the time is 1 year. Plugging in the values we get:

$72 = Principal × 0.08 × 1

Dividing both sides by 0.08 gives us the principal amount:

Principal = $72 / 0.08

Principal = $900

Therefore, Whitney loaned her friend $900.

User Shammara
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