Question 284788
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.