A person takes a simple interest loan at 7.5%. After 6 months, the amount of interest on the loan is $69.64. What was the amount of the loan?
Please help me. I have been working on this for awhile.
0.0375*x = 69.64
x = 1857.07
I used .0375 instead of .075 because it was only half a year
To find the amount of the loan, we can use the formula for simple interest:
Simple Interest = Principal × Rate × Time
The given information tells us that the interest on the loan after 6 months is $69.64 and the interest rate is 7.5%. We'll need to convert the interest rate to a decimal by dividing it by 100:
Rate = 7.5% ÷ 100 = 0.075
We also know that time is 6 months. Now we can rearrange the formula to solve for the principal (amount of the loan):
Principal = Simple Interest ÷ (Rate × Time)
Substituting the given values into the formula:
Principal = $69.64 ÷ (0.075 × 6)
Principal = $69.64 ÷ 0.45
Principal ≈ $154.75
Therefore, the amount of the loan was approximately $154.75.