Question

If Clare takes out a mortgage for 22 years at an interest rate of 3% and her monthly repayments are $984, what is the principal loan amount? Round your answer to the nearest dollar. Do NOT round until you have calculated the final answer.

Answer 1

The principal loan amount on the mortgage taken by Clare is $1,490.

Given the following data:

• Interest rate = 3 %

• Simple interest = $984

• Time = 22 years

To determine the principal loan amount on the mortgage taken by Clare:

Mathematically, simple interest is given by the formula:

$S.I = \frac{PRT}{100}$

Where:

• S.I is the simple interest.

• P is the principal amount.

• R is the interest rate.

• T is the time measured in years.

Making P the subject of formula, we have:

$P=\frac{100S.I}{RT}$

Substituting the given parameters into the formula, we have;

$P=\frac{100 \times 984}{3 \times 22}\\\\P=\frac{98400}{66}$

P = 1,490.909

To the nearest dollar:

Principal loan amount = $1,490.

Read more on principal loan amount here: https://brainly.com/question/22621039