Question

Mr. Peterson paid $1,020 in interest for a loan, which was given to him at a rate of 5% for 3 years. How much money did he borrow originally?

Answer 1

To find the original amount of the loan, we can use the formula Principal = Interest / (Rate × Time). By plugging in the given values, the original amount that Mr. Peterson borrowed is $6800.

Step-by-step explanation:

To find the original amount of the loan, we need to calculate the principal. The formula for calculating the total amount of interest is Interest = Principal × Rate × Time. Plugging in the given values, we have:

$1020 = Principal × 0.05 × 3

Now we can solve for Principal:

Principal = $1020 / (0.05 × 3) = $1020 / 0.15

Principal = $6800

Therefore, Mr. Peterson originally borrowed $6800.

Answer 2

The amount of money originally borrowed by Mr. Peterson is $6,800.

Step-by-step explanation:

Let us assume the money borrowed originally = P

Rate of interest = 5%

Time = 3 years

S interest = $1020

Simple Interest =
`(P * R * T )/(100)`

Substituting the all values, we get:

`1020 = (P * 5 * 3 )/(100)\\\implies P = (102000)/(15) = 6,800`

⇒ P = $6,800

Hence, the amount of money originally borrowed by Mr. Peterson is $6,800.