Question

Austin borrowed money from a credit union for 4 years and was charged simple interest at an annual rate of 5% the total interest that he paid was $160 how much money did he borrow​

Answer 1

To calculate how much money Austin borrowed, we rearrange the simple interest formula I = PRT, where P is the principal. Given the total interest I = $160, the annual rate R = 5%, and time T = 4 years, we find P to be $800.

Step-by-step explanation:

The question involves calculating the amount borrowed based on the total simple interest paid over a period of time. To find out how much Austin borrowed from the credit union, we use the formula for simple interest: I = PRT, where I is the interest, P is the principal amount (the initial amount borrowed), R is the annual interest rate (as a decimal), and T is the time in years. Given that the total interest paid was $160, the annual interest rate was 5%, and the time was 4 years, we can rearrange the formula to solve for P.

Substituting the known values into the formula, we get: $160 = P * 0.05 * 4. Simplifying this, we have $160 = 0.2P, or P = $160 / 0.2, which gives us P = $800. Thus, Austin borrowed $800.

Answer 2

Given:

Rate of simple interest = 5%

Time = 4 years

Total interest = $160

To find:

The amount borrowed by Austin from a credit union.

Solution:

The formula for simple interest is:

`I=(P* r* t)/(100)`

Where, P is principal, r is the rate of interest and t is the number of years.

Putting
`I=160,r=5,t=4` in the above formula, we get

`160=(P* 5* 4)/(100)`

`160=(20P)/(100)`

`160=(P)/(5)`

Multiply both sides by 5.

`800=P`

Therefore, Austin borrowed $800 from a credit union for 4 years.