You can put this solution on YOUR website! alvin borrowed money from a cousin at a rate of 10% simple interest. After 1 yrs, $7194 paid off the loan. How much did Alvin borrow?
------------------------------
A(t) = P(1+rt)
7194 = P(1+0.10*1)
7194 = P(1.1)
P = $6540
=================
Cheers,
Stan H.
You can put this solution on YOUR website! Let X ($) the amount of money that Alvin borrowed. After one year, he has to pay both the root X and the interest I. Since (simple) interest rate is 10%, the the interest is I = X*10%. There fore the total amount of money Alvin has to pay is X +I = X + X*10% = 1.1*X = $7194. So X = 7194/1.1 = ($)6540.
Normally, you can apply this formula for similar problems:
Vn = Vo*(1 + n*r)
Whereas:
-> Vn = the amount of money that pays off the loan after n years.
-> Vo = the amount of money that first borrowed.
-> r = the simple interest rate %/year.
-> n = number of years that the loan must be paid off.
(
