2.6k views
0 votes
sam was charged $1,050 in interest on a loan with a 2.5% interest rate. What was the original amount of the loan it he took 5 years to pay it back?

1 Answer

6 votes

Answer:

$8,400

Step-by-step explanation:

The interest can be calculated using the following equation:


I=\text{P}\cdot r\cdot t

Where P is the original amount of the loan, r is the interest rate, and t is the time that the person tool to pay it back.

So, we can replace I by $1,050, r by 2.5% or 0.025, and t by 5 years. Then:


1050=P\cdot0.025\cdot5^{}

Finally, we can solve for P as:


\begin{gathered} 1050=P\cdot0.125 \\ (1050)/(0.125)=(P\cdot0.125)/(0.125) \\ 8400=P \end{gathered}

Therefore, the original amount of the loan was $8,400

User Mmoran
by
8.3k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories