Question

Money is borrowed at 8%simple interest. After one year $1284.12 pays off the loan. How much was originally borrowed?

Answer 1

$284 was originally borrowed

Answer 2

interest:  i = p * r * t.

Here, p + interest = $1284.12.  Thus,

          p + p * 0.08 * 1 = $1284.12.  Simplifying,

           1.08p = $1284.12.  Solving for p,     p = $1189.

The amount originally borrowed was $1189.