Question

Jayvion took out a simple interest loan to pay for some new furniture. If the loan was for 5 years at 12% and he paid $960 interest, how much money did he borrow?

Answer 1

$544.73

General Formulas and Concepts:

Pre-Algebra

Order of Operations: BPEMDAS

1. Brackets
2. Parenthesis
3. Exponents
4. Multiplication
5. Division
6. Addition
7. Subtraction

• Left to Right

Algebra I

Simple Interest Rate Formula:
`\displaystyle A = P(1 + r)^t`

• A is final amount
• P is principle amount
• r is rate
• t is time

Explanation:

Step 1: Define

A = 960

r = 0.12

t = 5

Step 2: Solve for P

1. Substitute in variables [Simple Interest Rate Formula]:
   `\displaystyle 960 = P(1 + 0.12)^5`
2. [Interest] (Parenthesis) Add:
   `\displaystyle 960 = P(1.12)^5`
3. [Interest] Evaluate exponents:
   `\displaystyle 960 = P(1.76234)`
4. [Interest] [Division Property of Equality] Isolate P:
   `\displaystyle 544.73 = P`
5. [Interest] Rewrite:
   `\displaystyle P = 544.73`