Margie Pagano is buying a car. Her June monthly interest at 12.5% was $201. What was Margie’s principal balance at the beginning of June? (Use 360 days a year. Do not round intermediate calculations. Do not round the denominator before dividing. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
1876.11
To find Margie's principal balance at the beginning of June, we can use the formula for calculating interest:
Interest = Principal * Rate * Time
In this case, we know the interest ($201) and the rate (12.5%), but we need to find the principal balance. We can rearrange the formula to solve for the principal:
Principal = Interest / (Rate * Time)
First, let's convert the rate from a percentage to a decimal by dividing it by 100:
Rate = 12.5% / 100 = 0.125
Next, we need to determine the time in years. Assuming there are 360 days in a year, we divide the number of days in June (30) by 360:
Time = 30 / 360 = 1/12 (or 0.0833 as a decimal)
Now we can substitute the values into the formula and calculate the principal:
Principal = $201 / (0.125 * 1/12)
Principal = $201 / (0.015625)
Principal ≈ $12,864 (rounded to 2 decimal places)
Therefore, Margie's principal balance at the beginning of June was approximately $12,864.