Question

Solve the equation involving simple interest Mike borrowed some money for 2 years at 2% simple interest. If he had to pay back a total of $3952, how much did he originally borrow?

Answer 1

Given that Mike borrowed an amount for 2 years at 2% simple interest, and paid back a total of $3952.

To Determine: The original money he borrowed

Solution:

The formula to find the amount for simple interest is

`A=P(1+rt)`

Where:

A is the Amount paid back

r is the rate

t is the time

Given that

`\begin{gathered} A=3952 \\ r=(2)/(100)=0.02 \\ t=2 \end{gathered}`

Substitute the given into the formula

`\begin{gathered} A=P(1+rt) \\ 3952=P(1+0.02*2) \\ 3952=P(1+0.04) \\ 3952=P(1.04) \\ 3952=1.04P \\ P=(3952)/(1.04) \\ P=3,800 \end{gathered}`

Hence, the Mike originally borrow $3,800