You agree to lend ________ to a friend for a year at an annual interest rate of 10%. At the end of the year your friend pays you $600 in interest.

Question

Quizplus · Accepted Answer

To find the principal amount lent to the friend, you can use the formula for simple interest: Interest = Principal × Rate × Time. Given the interest is $600, the rate is 10% (or 0.10 as a decimal), and the time is 1 year, you can rearrange the formula to solve for the principal: Principal = Interest / (Rate × Time). Plugging in the numbers: Principal = $600 / (0.10 × 1) = $6,000.

You Agree to Lend ________ to a Friend for a Year