Question

Jaime's refrigerator loan statement said that he would pay $1,026 as interest after 4 years at an interest rate of 13.5%. How much did Jaime borrow to buy the refrigerator?

Answer 1

$ 1900

Explanation:

Starting from the equation of simple interest, which is defined as follows:

I = P * r * t

Being I the interest, P the value of the product, r the interest rate and t would be time.

We want to know the price of the product, therefore, solving the equation we have:

P = I / r * t

We know each other's values so we replace:

P = 1026 / (0.135 * 4)

P = $ 1900 was the value of the refrigerator Jaime bought.