marisol owed $384 in interest after a 24 month loan with a simple interest rate of 8.09%. What was the initial amount of the loan?
Okay, so then, 348 x .0809 x 2 will equal P?
348 = P * 0.0809 * 2
348 = 0.1618P
348/0.1618 = P
Oh okay!! Thank you!!!
To find the initial amount of the loan, we can use the formula for simple interest:
I = P * r * t
Where:
- I is the interest amount
- P is the initial principal (loan amount)
- r is the interest rate per period
- t is the number of periods
In this case, we know:
- I = $384
- r = 8.09% (or 0.0809 as a decimal)
- t = 24 months
Substituting these values into the formula:
384 = P * 0.0809 * 24
Now we can solve for P.
Divide both sides of the equation by (0.0809 * 24):
P = 384 / (0.0809 * 24)
P ≈ $1662.77
Therefore, the initial amount of the loan, P, is approximately $1662.77.
I = PRT
348 = P * 0.0809 * 2
Solve for P