A borrower has agreed to pay 10000 in 9 months at 10% simple interest. How much did this borrower receive?
To find out how much the borrower received, we need to calculate the amount of the loan.
The formula to calculate simple interest is:
I = P * r * t
Where:
I = interest
P = principal (the amount borrowed)
r = interest rate (in decimal form)
t = time (in years)
In this case, the interest rate is 10% (0.10) and the time is 9 months (0.75 years).
I = P * 0.10 * 0.75
We know that I (interest) is $10,000 because that is the amount the borrower agreed to pay.
$10,000 = P * 0.10 * 0.75
To find P (principal), we divide both sides of the equation by (0.10 * 0.75):
$10,000 / (0.10 * 0.75) = P
$10,000 / 0.075 = P
P ≈ $133,333.33
Therefore, the borrower received approximately $133,333.33.
To calculate the amount the borrower received, we need to find the principal amount (P). The formula to calculate simple interest is:
Simple Interest = (Principal amount * Interest rate * Time)/100
Given:
Simple Interest = $10,000
Interest rate = 10%
Time = 9 months
Let's plug these values into the formula and solve for the principal amount:
$10,000 = (P * 10% * 9 months) / 100
Simplifying the equation:
10,000 = (P * 0.1 * 9) / 100
10,000 = (0.9P) / 100
To remove the denominator, we multiply both sides by 100:
1,000,000 = 0.9P
Dividing both sides by 0.9:
P = 1,000,000 / 0.9
P ≈ $1,111,111.11
Therefore, the borrower received approximately $1,111,111.11.