Question

(PLEASE HELP QUICKLY) Three years ago, Claire borrowed money from her father to pay for a class trip. She agreed to pay 6% simple annual interest on the loan. Now she owes him $90 in interest, plus the principal amount. How much did Claire borrow?
A. $60
B. $90
C. $180
D. $500

Answer 1

Let's solve this problem step-by-step.

STEP-BY-STEP SOLUTION:

Let's first establish the simple interest formula which we will require to solve this problem as displayed below:

Simple Interest = Principal × Rate of Interest × No. of Time Periods

I = PRN

Now let's substitute the values from the problem into this formula as displayed below:

I = $90

P = ?

R = 6%

N = 3 years

I = PRN

90 = P × 0.06 × 3

P = 90 / 0.06 × 3

P = 90 / 0.18

P = $500

ANSWER:

As the principal and the amount borrowed is the same, Claire borrowed $500. Therefore, the answer is:

D ) $500


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