Me. Peterson wrote a check of 7820 to pay off a loan, which was given to him at a rate of 5 percent simple interest for 3 years. How much money did he borrow or
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In a Simple interest rate, where Money grows at fixed rate each year is given a linear equation, because rate of change is fixed ( throughout the year). A is the balance of the account after n( variable) years with a fixed rate( slope).
A = P + Pnr / here the n is the variable.
7800 = P( 1 +3(0.05)=
7800 = P + P( 0.15)
P = 7800 = 6783
$6800=p, the principal or how much was borrowed
By definition, SIMPLE INTEREST means that there is no compounded interest.
I am assuming that the 5% rate is per year.
The unit of year is in the numerator and denominator. It cancels.
Let's divide both sides by 1.15...