Suppose that you took out a loan at 10% interest for 278 days. If the amount of interest was $761.64, use the exact interest method to find the amount of principal you borrowed. (Round to the nearest whole dollar)
A) $8,590
B) $10,000
C) $9,863
D) $12,000

Question

Quizplus · Accepted Answer

The exact interest method calculates interest based on a 365-day year. The formula to find the principal (P) is P = I / (r * t), where I is the interest ($761.64), r is the annual interest rate (10% or 0.10), and t is the time in years (278/365). Plugging in the values: P = 761.64 / (0.10 * (278/365)) = $10,000 (rounded to the nearest whole dollar).

Suppose That You Took Out a Loan at 10% Interest