Question

Beth took out a 6-month loan to buy furniture. If she had a 4% simple interest rate and paid a total of $28 in interest, calculate the original loan amount

Answer 1

The original loan amount was $116.67.

Step-by-step explanation:

To calculate the original loan amount, we can use the formula for simple interest:

Interest = Principal * Rate * Time

Given that the interest rate is 4% and the interest paid is $28, we can set up an equation:

$28 = Principal * 0.04 * 6 months

Solving for the principal, we have:

Principal = $28 / (0.04 * 6)

Principal = $116.67

Therefore, the original loan amount was $116.67.