Find the amount of the principal on a loan at 6% interest for 274 days if the interest was $68.50, using the ordinary interest method. (Round to the nearest whole dollar amount)
I = PRT
68.5 = P * 0.06 * 0.751
68.5 = 0.045P
68.5 / 0.045 = P
1,522 = P
To find the principal amount on a loan using the ordinary interest method, we can use the formula:
Interest = Principal * Rate * Time
In this case, the interest is given as $68.50, the rate is 6% (or 0.06), and the time is 274 days.
Let's plug these values into the formula and solve for the principal:
$68.50 = Principal * 0.06 * 274
Divide both sides of the equation by 0.06 * 274:
$68.50 / (0.06 * 274) = Principal
Calculating the right side of the equation:
$68.50 / 16.44 = Principal
Rounding the principal to the nearest whole dollar amount:
Principal = $4.17
Therefore, the principal amount on the loan is $4.
To find the principal amount on a loan using the ordinary interest method, you need to use the formula:
Principal = (Interest * 365) / (Rate * Time)
Where:
- Principal is the amount of the loan
- Interest is the interest amount
- Rate is the annual interest rate
- Time is the time period in days
In this case, we are given:
- Interest = $68.50
- Rate = 6% = 0.06 (decimal form)
- Time = 274 days
Substituting these values into the formula, we get:
Principal = (68.50 * 365) / (0.06 * 274)
Now, let's calculate the principal using a calculator:
Principal = (24992.5) / (16.44)
Principal ≈ $1520.78
Rounding this value to the nearest whole dollar amount, the principal amount on the loan is $1,521.