Question

4. A person borrows money from a friend and they decide

to use a simple interest formula. I = P.R.I where I is
the interest in dollars, P is the principle (original money
loaned) in dollars, R is the interest rate, and T is the time
in years. If the person paid $768 in interest for a loan
over 5 years at a rate of 4%, how much money did they
original horrow?

Answer 1

9514 1404 393

Answer:

$3,840

Explanation:

The interest formula can be rearranged to find the principal amount.

I = Prt

P = I/(rt) = $768/(.04·5)

P = $3,840

They originally borrowed $3,840.