SOLUTION: A 6.5% simple interest loan for 8 months had an interest charge of $234. How much money was borrowed?

Question 485514: A 6.5% simple interest loan for 8 months had an interest charge of $234. How much money was borrowed?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
interest charge was $234.
6.5% is the annual interest rate percent i presume.
the rate is .065 per year.
the monthly rate is .0054166667 per month.
the total interest is 8 * .0054166667 = .043333333
since this is simple interest, there is no compounding that has to be performed.
divide the interest by the interest rate and you get the principal of $5400.
take 5400 and multiply it by .065 to get $351.
multiply that by 8 and divide it by 12 to get $234.
the money that was borrowed is $5400.

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