Question

Joe overheard his father complaining about having to pay $300 in interest in just one year. The simple annual interest rate was 16%. How much money did Joe’s father borrow?

Answer 1

$1,875

Explanation:

Interest = Principal x Rate x Time

Principal = amount of money borrowed

I = $300

r = 16% or .16

t = 1 (year)

300 = .16P

300/.16 = P

P = $1,875