Simple interest

Question

A 4.5% loan was taken out a simple interest for 6 years. The amount paid back was $9,144. What was the amount that was originally borrowed?

Answer 1

Simple Interest formula: I = PRT

In this problem R = .045, T = 6 You are given the amount of the total payments

Payments = Total borrowed + Interest

Total Payments = Amount borrowed + I , from above I = PRT

9144 = B + B(.045)(6) I am using B for the amount borrowed

9144 = B(1 + (.045)(6))

9144 = B (1.270)

B = 7200