After taking out a one-year loan with an annual interest rate of 10 percent, Toben pays $3,300 back to the bank. The principal of the loan was _______ and the interest payment was _______.
A) $3,000; $300
B) $3,300; $300
C) $300; $3,300
D) $300; $3,000

Question

Quizplus · Accepted Answer

Let P be the principal of the loan. Then, the interest payment is 0.1P (since the interest rate is 10%). Therefore, we have:

P + 0.1P = 3300
1.1P = 3300
P = 3000

Thus, the principal of the loan was $3,000 and the interest payment was $300.

After Taking Out a One-Year Loan with an Annual Interest