Katie Chalmers borrowed money from her credit union at 13.2% simple interest to buy furniture. If the loan was repaid in 2½ years and the amount of interest was $1,320, how much did Katie borrow?
I = PRT
1,320 = P * 0.132 * 2.5
1,320 = 0.33P
1,320 / 0.33 = P
4,000 = P
Thanks for the help!!! ;)
You're welcome.
To find the amount Katie borrowed, we need to use the formula for simple interest:
Interest = Principal x Rate x Time
We are given that the interest is $1,320, the rate of interest is 13.2%, and the time is 2½ years (or 2.5 years). Let's plug these values into the formula and solve for the principal:
$1,320 = Principal x 0.132 x 2.5
To isolate the principal, divide both sides of the equation by (0.132 x 2.5):
$1,320 / (0.132 x 2.5) = Principal
Simplifying:
$1,320 / 0.33 = Principal
Principal = $4,000 (rounded to the nearest dollar)
Therefore, Katie borrowed $4,000.