Question

At a rate of 4%, you paid $144.00 in interest over a two-year period. What was the original amount of your loan?

Answer 1

Principal is the same as original amount.
1. You convert the rate % to a decimal number. (divide by 100)

2. Substitute:

P = 144 / (.04 x 2)

3. Solve:

P = 144 / .08
P = 1,800

4. Your answer is $1,800