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Margaret’s car loan statement said that she would pay $7,683.20 in interest for a 5-year loan at an interest rate of 9.8%. Assuming this is an example of simple interest, how much did Margaret borrow to
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Margaret’s car loan statement said that she would pay $7,683.20 in interest for a 5-year loan at an interest rate of 9.8%. Assuming this is an example of simple interest, how much did Margaret borrow to buy the car?

User Onuralp
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1 Answer

5 votes

Answer: $15680

Step-by-step explanation:

Principal = Unknown

Time = 5 years

Rate = 9.8%

Simple interest = $7683.20

Simple interest= PRT/100

7683.20 = (P × 9.8 × 5)/100

7683.20 = 49P/100

Cross multiply

768320 = 49P

P = 768320/49

Principal = $15680

Margaret borrowed $15680 to buy the car.

User Mateusz Kowalczyk
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