SOLUTION: Jill gets a loan at 8% simple interest for 5 years, The loan accumulates $400 in interest, what was the principle amount of the loan?

Question 433890: Jill gets a loan at 8% simple interest for 5 years, The loan accumulates $400 in interest, what was the principle amount of the loan?

Answer by Sarpi(32) (Show Source): You can put this solution on YOUR website!
A simple interest loan;
Time(T)= 5yrs, Rate(R)= 8%, Interest(I)= $400, Principal(P)= ?
derived from the Simple Interest (SI) formula; .
Thus which is equal to 1000.
Therefore, the principal is $1,000.

Checking with the SI formula; .
which is exactly equal to the interest in question ($400).
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