Question

You have agreed to loan some money to a friend at a simple interest rate of 180% which is outrageous but still about half of the payday loan places! To make it easy on your friend who never took Math 140 you tell him you'll give him some money now and he just needs to pay you back a nice even $600 in 4 weeks. How much money do you hand him

Answer 1

Answer:

the amount borrowed is ≅ $527

Step-by-step explanation:

Given that;

simple interest rate r = 180%  p.a

Let the amount borrowed (principal) be $x.

time t  = 4 weeks = 28 days

= 28/365 year

= 0.0767 year

we all know that :

$Simple \ \ interest = \dfrac{P*r*t}{100}$

$Simple \ \ interest = \dfrac{x*180*0.0767}{100}$

Simple interest = 0.13806x

Total amount to be paid after 4 weeks= Interest+Principal

= x + 0.13806x

= 1.13806x

Thus;

1.13806x = $600

x = $600/ 1.13806

x = $527.21

Hence; the amount borrowed is ≅ $527