Final answer:
Jim originally borrowed $2222.22 for the car loan, as determined by dividing the total interest paid ($500) by the product of the annual interest rate (4.5%) and the number of years (5).
Step-by-step explanation:
To determine how much Jim originally borrowed for the car loan, we can use the formula for simple interest: Interest = Principal × rate × time. Given that Jim paid $500 in interest for a five-year loan period at a 4.5% interest rate, we set the interest to $500, the rate to 4.5% (or 0.045 as a decimal), and the time to 5 years.
To solve for the principal, which is the original amount borrowed, we rearrange the formula to solve for principal (P):
P = Interest / (rate × time)
In this case:
P = $500 / (0.045 × 5)
P = $500 / 0.225
P = $2222.22
Therefore, Jim originally borrowed $2222.22 for the car loan.