Find the amount of the principal on a loan at 6% interest for 274 days if the interest was $68.50, using the ordinary interest method. (Round to the nearest whole dollar amount)
A) $1,500
B) $1,521
C) $313
D) $6,850

Question

Quizplus · Accepted Answer

The ordinary interest method uses a 360-day year. The formula for interest is I = PRT, where I is interest, P is principal, R is rate, and T is time in years. Rearranging gives P = I / (RT). Here, I = $68.50, R = 0.06, and T = 274/360. Solving gives P ≈ $1,500.

Find the Amount of the Principal on a Loan at 6