Question

In the given information about a loan, with Time = 7 years, Interest Rate = 6%, and Interest = $840. What was the principal on the loan?

A. $200.00
B. $352.80
C. $1,862.50
D. $2,000.00

Answer 1

To find the principal on the loan, we can use the formula: Principal + (Principal × Rate × Time) = Interest. In this case, the Interest is given as $840, the Time is 7 years, and the Rate is 6%. The principal on the loan was $591.55.

Step-by-step explanation:

To find the principal on the loan, we can use the formula:

Principal + (Principal × Rate × Time) = Interest

In this case, the Interest is given as $840, the Time is 7 years, and the Rate is 6%.

Let's substitute the values into the formula:

• Principal + (Principal × 0.06 × 7) = 840

Simplifying the equation:

• Principal + (Principal × 0.42) = 840
• Principal × 1.42 = 840
• Using algebraic manipulation, we can solve for the Principal:

• Principal = 840 / 1.42
• Principal = $591.55

Therefore, the principal on the loan was $591.55.