Question

A publicly traded construction company reported that it just paid off a loan that it received 1 year earlier. If the total amount of money the company paid was $1.5 million and the interest rate on the loan was 10% per year, how much money did the company borrow 1 year ago

Answer 1

$1,363,636.36

Step-by-step explanation:

A public traded construction company just paid off a loan that was received one year earlier

The amount of money paid by the company was $1,500,000

The interest rate was 10% per year

= 10/100

= 0.10

Therefore the amount of money that was borrowed last year can be calculated as follows

Let x represent the amount of money borrowed

x + x(0.10)= 1,500,000

x + 0.10x= 1,500,000

1.1x= 1,500,000

x= 1,500,000/1.1

x= $1,363,636.36

Hence the company borrowed $1,363,636.36 a year ago