Question

Jermaine’s father owes $6,300 in interest at the end of a 60-month car loan at a 7% simple annual interest rate. What was the original loan amount?

Answer 1

Answer:

$18,000

Step-by-step explanation:

It is given that the interest amount $6,300

We will calculate the principal amount.

So we use the formula

I = prt

P = Principal amount

r = rate of interest 7% ( 0.07 )

t = time in years 60 months ( $\frac{60}{12}$ years )

6,300 = P × 0.07 × $\frac{60}{12}$

6,300 = P × 0.07 × 5

6,300 = 0.35P

$\frac{6,300}{0.35}$ = P

P = $18000

The original loan amount was $18,000.  

Answer 2

I = Prt
6300 = P * .07 * (60/12)
6300 = .35P
6300 / .35 = P
18000 = P

$18,000 is the answer you are looking for! I hope this helps! :D