Question

Victor borrowed money at 5.25 percent simple annual interest. At the end of the year, the interest on the loan is $255.94. What was the amount of the loan?

Answer 1

$4,875.05 is your answer

$4,875.05 ;^)

Answer 2

The amount of the loan was $4,875.24

Given:
interest = 255.94
rate = 5.25%
term = 1 year

simple annual interest = principal * interest rate * term

principal = simple annual interest / (interest rate * term)
principal = 255.95 / (5.25% * 1yr)
principal = 255.95 / 0.0525
principal = 4,875.24

S.I. = 4,875.24 * 5.25% * 1yr
S.I. = 255.95