Question

#12 Eva took out a 5-year loan to buy a car at a 2% simple interest rate. If she has to pay $1,200 in interest, how much principal did she borrow? *

Answer 1

$12,000

Explanation:

P = 1200 / ( 0.02 × 5 ) = 12000

P = $ 12,000.00

Answer 2

$12,000

Explanation:

2% for 5 years is 10% in total. if after the 5 years she gotta pay 1200, this mean 0.1p=1200

multiply 10 on both sides to find p, or principal.

p=12000