Question

3 years ago clear borrowed money from her father to pay for a class trip she agreed to pay 6% simple annual interest on the loan now she owes him $90 an interest plus the principal amount how much did Claire borrow????

Answer 1

The principal amount was $500.

Explanation:

Simple (non-compound) interest $90 for three years means $30 for 1 year.

Knowing the interest amount for one year and the interest rate 0.06 (6%) we can determine the principal from:

(interest) = (principal) x (interest rate)

$30 = (principal) x 0.06

=> (principal) = $30 / 0.06 = $500