Question

a. If the interest on a note is $1,500, the interest rate is 5%, and the time is 90 days, what is the principal? (Assume 360 days in a year)

Answer 1

$120,000

Step-by-step explanation:

Interest = $ 1500

Time of Interest = 90 days

Interest rate = 5%

Principal = ?

Interest for 360 days = ($1500 / 90) x 360

= $6000

Principal Amount = Interest / Interest rate

= $6000 / 5%

=$6000 / 0.05

=$120,000

Hence, the Principal is $120,000