Question

Need help ASAP. A woman obtained a 2-year loan to cover the costs of a vacation. She was surprised to find that the simple annual interest rate of 8.5% meant that she would be paying $425 in interest. What was the original amount of her loan?

Answer 1

2500

Explanation:

Answer 2

$2500

Explanation:

The formula for the interest is ...

I = Prt

Filling in the given values, I = 425, r = 0.085, t = 2, we find the principal (P) to be ...

425 = P(0.085·2)

425/0.17 = P = 2500 . . . . divide by the coefficient of P

The original amount of the loan was $2500.