A student borrowed $40,000 for college and over the course of the loan, repaid $55,000. what was the principal of the loan?
a. $15,000
b. $40,000
c. $55,000
d. $95,000
The principal of the loan is the amount borrowed initially. Since the student borrowed $40,000, the answer is option b. $40,000.
To find out the principal of the loan, we need to subtract the amount repaid from the total borrowed amount.
Total borrowed amount - Amount repaid = Principal of the loan
$40,000 - $55,000 = -$15,000
Since the principal cannot be negative, the correct answer is (b) $40,000.
To determine the principal of the loan, we need to find the original amount that was borrowed.
The question provides us with information about the total amount repaid, which is $55,000. However, this amount includes both the principal (the original amount borrowed) and any interest or fees that were added.
To find the principal, we subtract the total amount repaid ($55,000) from the total amount borrowed. In this case, the total amount borrowed is $40,000.
Principal = Total Amount Borrowed - Total Amount Repaid
Principal = $40,000 - $55,000
Principal = -$15,000
From the calculation, we can see that the principal is -$15,000, which does not make sense as a loan amount. This indicates that there might be an error in the given information or the calculation.
Therefore, based on the given options, none of them seem to be the correct answer.