Question

Suppose that your bank has a minimum loan charge off $48 when you borrow at 6% ordinary interest for 90 days. What principal borrowed will result in a $48 interest charge.

Answer 1

Answer:

The principal amount is $3244.45 will result in a $48 interest charge.

Step-by-step explanation:

We are given the following in the question:

I = $48

R = 6%

Time = 90 days

We have to find the principal amount.

$A = P(1+rt)$

where A is the amount, P is the principal, r is the rate and t is time in years.

$A = P(1+rt)\\P+I= P(1+rt)\\P-P(1+rt)= -I\\p(1-1-rt)=-I\\\\P = \dfrac{I}{rt}$

Putting the values, we get,

$P = \dfrac{48}{0.06\times \frac{90}{365}}\\\\\\P = \dfrac{48\times 365}{0.06\times 90} = 3244.45$

Thus, the principal amount is $3244.45 will result in a $48 interest charge.