You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%, or 1% a month. If the first payment is $300, how much is the principal portion of the payment?

Question

Quizplus · Accepted Answer

The interest for the first month is calculated as $3,000 * 1% = $30. Since the payment is $300, subtracting the interest ($30) from the total payment leaves $270 that goes towards the principal.

You Obtain a Loan of $3,000 Based on Simple Interest