SOLUTION: Matt paid $136.50 interest on a loan at 4% simple interest for 1.5 years. How much did he borrow?
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Question 1194568: Matt paid $136.50 interest on a loan at 4% simple interest for 1.5 years. How much did he borrow?
Answer by math_tutor2020(3816) (Show Source): You can put this solution on YOUR website!
Either memorized or in your notes somewhere, you should have this simple interest formula
i = P*r*t
The variables are:
i = simple interest
P = principal, aka amount borrowed
r = annual interest rate in decimal form
t = number of years
In this case,
i = 136.50
P = unknown and what we want to solve for
r = 0.04
t = 1.5
So,
i = P*r*t
136.50 = P*0.04*1.5
136.50 = P*0.06
0.06P = 136.50
P = 136.50/0.06
P = 2,275
Answer: $2,275
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